Fiona's Hourly Wage Increases from $8 to $10

question 349

Multiple Choice

Fiona's hourly wage increases from $8 to $10. Which of the following describes a consequence of the increase in Fiona's wage?

• A)The opportunity cost of Fiona's leisure time has decreased.
• B)Fiona may choose to work fewer hours due to the increase in her wage.
• C)If Fiona's labor supply curve is upward sloping, she will choose to work fewer hours.
• D)Both a and b are correct.

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Definitions:

Adjustment

An adjustment in accounting is an entry made in journal accounts that represents a correction or modification to prior financial records.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead costs to products or job orders, calculated before the periods in which it is applied.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to utilities, depreciation, and salaries of supervisors.

Direct Labor

Refers to the wages and benefits of employees who are directly involved in the production of goods.