Suppose That a College Student Receives an Offer for a Summer

question 27

Multiple Choice

Suppose that a college student receives an offer for a summer internship with a stock brokerage firm. Unfortunately for the student, the internship is unpaid. Is it ever economically beneficial to accept an unpaid job?

• A)Yes, because the experience gained during the internship would increase the student's human capital.
• B)No, because the opportunity cost is too high.
• C)No, because the student is signaling to future employers that he or she is willing to accept low wages.
• D)Yes, because accepting an unpaid job signals to future employers that the student has stable personal finances.

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Definitions:

Order of Liquidity

Refers to the sequence in which assets are ranked based on how quickly they can be converted into cash, with cash being the most liquid asset.

Accounts Payable

A liability to a creditor, carried on open account, usually for purchases of goods and services.

Notes Payable

Financial obligations represented by formal written agreements to pay specified amounts at determined future dates.

Salaries and Wages Payable

Salaries and wages payable are current liabilities recorded on a company's balance sheet, representing the amount owed to employees for work performed that has not yet been paid.