CHAPTER 4 4-1 Two examples of explicit transactions are a collection from a customer and a payment to a creditor. 4-2 Two examples of implicit transactions are adjustments for depreciation and for accrued wages. 4-3 Synonyms for unearned revenue are defer
1. A certain transaction affecting only two accounts causes a liability to increase by a certain amount. Which one of the following could be another effect of the same transaction? (Points: 1) an asset account is increased by the same amount. another liab
CHAPTER 5 5-1 No. All public companies report it because the statement of cash flows is a required statement with a required format. 5-2 A cash flow statement shows the sources of changes in cash balances and: a) b) c) aids in predicting future cash flows
CHAPTER 2 2-1 The operating cycle depends on the nature of the company. It is the time it takes the company to use cash to acquire goods and services, to sell those goods and services to customers, and to collect cash from the sales. 2-2 A fiscal year is
7) State algebraically the condition for equilibrium in consumer indifference theory, and explain in detail what adjustments will be made if the consumers budget is not at equilibrium. (pg:129 graph 4-8) MRS = Px/Py Slope of indifference curve slope of bu
or rewritten as Qx/ Px* Px/Qx
Cross price elasticity: reveals the responsiveness of the demand for a good to changes in the price of a related good.
1. Define a demand function, and a demand curve. Do the same for a supply function and curve.
10. Draw diagrams and narrate them to show that an effective legal price ceiling, above the market equilibrium, results in a transfer of welfare from producers to consumers, and an absolute net loss of welfare to society as a whole.
No effect whatever. A
15.) Define the 3 stages of production and illustrate them with the aid of an isoquant diagram.
Stage I: Increasing marginal returns to labor: Range of input usage over which marginal product increases. where APL and MPPL intersect Stage II: Decreasing (D
27.) State and explain the rule for allocating production of a good among several plants. Page 292-293 Principle: Muli-plant Output Rule Let MR(Q) be the marginal revenue of producing a total of Q = Q1 + Q2 units of output. Suppose the marginal cost of pr
Chapter 5 Appendix: Indifference Curves
In Chapter 5 we showed why the rational spending rule is a simple consequence of diminishing marginal utility. In this appendix, we introduce the concept of indifference curves to show how the same rule can be devel
21) Opportunity Cost: (pg: 5) The cost of the explicit (accounting) and implicit resources that are forgone when a decision is made. It's the value of the next-best alternative you are giving up plus the dollar value. Exp.: The opportunity cost of taking