Figure 3-7 11) Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for bicycle helmets. Which panel best describes what happens in this market if there is a substantial increase in the price of bicycles? A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d) 12) Refer to Figure 3-7. Assume that […]
18.2 Balance of Payments 1) The difference between merchandise exports and imports is called the ________ balance. A) current account B) capital account C) official reserve transactions D) trade 2) The account that shows international transactions involving currently produced goods and services is called the A) trade balance. B) current account. C) balance of payments. D) capital account. 3) The account […]
51.The following information concerning the current assets and current liabilities of Mason Company at December 31, 2015, is presented below. Current Assets Cash $6,700 Accounts Receivable $7,900 Less Allowance (70) 7,830 Inventory 2,270 Prepaid expenses 500 Total $17,300 Current Liabilities Accounts payable $9,000 Wages payable […]
11) Economists assume that rational people do all of the following except A) use all available information as they act to achieve their goals. B) undertake activities that benefit others and hurt themselves. C) weigh the benefits and costs of all possible alternative actions. D) respond to economic incentives. 12) Economics does not study correct or incorrect behaviors, but rather it […]
21) Refer to Figure 12-1. Suppose each of Firms A, B, and C are producing 500 kilos of potatoes. Which of the following statements correctly describes the productive efficiency of this industry? A) Productive efficiency would be achieved if Firm B produced all the output, since it has the lowest MC for the production of 500 kilos. B) It is possible to reduce the […]
57) When the real interest rate falls, there is A) an increase in the slope of the consumption function. B) an upward shift of the consumption function. C) a downward shift of the consumption function. D) a decrease in the slope of the consumption function. E) a movement upward along the consumption function. 58) When the real interest rate rises, there is A) an […]
Table 9-11 Production and Consumption Production Without Trade With Trade Clocks Hats Clocks Hats Denmark 900 150 1,200 0 Belize 150 100 0 400 21) Refer to Table 9-11. If the actual terms of trade are 1 hat for 1.8 clocks and 150 hats are traded, how many hats will Denmark gain compared to the “without trade” […]
14.1 Oligopoly and Barriers to Entry 1) A key part of Microsoft’s business strategy in the video game console market has been A) to wait until competitors introduce new technology in their products before incorporating the technology in its products. B) to concentrate on selling its products through large discount retailers like Wal-Mart. C) the innovation of new products which initially have little […]
32) Which of the following is NOT a potential solution to the tragedy of the commons? A) setting a production quota B) granting individual transferable quotas C) subsidizing use of the resource D) establishing property rights to the resource E) None of the above is correct because they are all potential solutions to the tragedy of the commons. 33) If the government assigns private […]
31) Compared to a similar perfectly competitive industry, a single-price monopoly A) creates a deadweight loss and decreases economic profit. B) produces more output. C) creates a deadweight loss and decreases consumer surplus. D) is more efficient because there is no wasteful competition. E) sets a lower price because there is less competition. 32) In a monopoly, producers ________ and consumers ________. A) […]
136.Mercury Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $150,000 was sold for its book value in Year 2. The following selected information is available for Mercury Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
At December 31Year 2Year 1
Equipment$610,000$750,000
Accumulated Depreciation-Equipment428,000500,000
A. $32,000.
B. $68,000.
C. $38,000.
D. $40,000.
E. $36,000.
137.Jamison Company reports depreciation expense of $35,000 for Year 2. Also, equipment costing $140,000 was sold for a $5,000 gain in Year 2. The following selected information is available for Jamison Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
At December 31Year 2Year 1
Equipment$610,000$750,000
Accumulated Depreciation-Equipment428,000500,000
A. $23,000.
B. $35,000.
C. $38,000.
D. $40,000.
E. $67,000.
138.Jeffreys Company reports depreciation expense of $40,000 for Year 2. Also, equipment costing $240,000 was sold for a $10,000 loss in Year 2. The following selected information is available for Jeffreys Company from its comparative balance sheet. Compute the cash received from the sale of the equipment.
At December 31Year 2Year 1
Equipment$510,000,000$750,000
Accumulated Depreciation-Equipment328,000500,000
A. $62,000.
B. $38,000.
C. $28,000.
D. $18,000.
E. $58,000.
139.Bagwell's net income for the year ended December 31, Year 2 was $185,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash received from the sale of its common stock during Year 2.
At December 31Year 2Year 1
Common Stock, $5 par value$500,000$450,000
Paid-in capital in excess of par948,000853,000
Retained earnings688,000582,000
A. $185,000.
B. $106,000.
C. $95,000.
D. $50,000.
E. $145,000.
140.Bagwell's net income for the year ended December 31, Year 2 was $175,000. Information from Bagwell's comparative balance sheets is given below. Compute the cash paid for dividends during Year 2.
At December 31Year 2Year 1
Common Stock, $5 par value$500,000$450,000
Paid-in capital in excess of par948,000853,000
Retained earnings688,000582,000
A. $79,000.
B. $201,000.
C. $95,000.
D. $50,000.
E. $69,000.
141.Scranton, Inc. reports net income of $230,000 for the year ended December 31. It also reports $87,700 depreciation expense and a $5,000 gain on the sale of equipment. Its comparative balance sheet reveals a $35,500 decrease in accounts receivable, a $15,750 increase in accounts payable, and a $12,500 decrease in wages payable. Calculate the cash provided (used) in operating activities using the indirect method.
A. $376,450.
B. $351,450.
C. $356,450.
D. $319,950.
E. $263,750.
142.Alvez Company reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, and a $100,000 decrease in notes payable. Calculate the cash provided (used) in operating activities using the indirect method.
A. $461,800.
B. $371,400.
C. $381,400.
D. $351,000.
E. $361,000.
143.Alvez reports net income of $305,000 for the year ended December 31. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, a $75,000 increase in equipment, and a $100,000 decrease in notes payable. Calculate the net increase in cash for the year.
A. $216,400.
B. $281,400.
C. $381,400.
D. $206,400.
E. $406,400.
144.Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year$233,000
Cash dividends declared for the year$50,000
Proceeds from the sale of equipment$85,000
Gain on the sale of equipment$4,500
Cash dividends payable at the beginning of the year$22,000
Cash dividends payable at the end of the year$30,000
Net income for the year$110,000
The ending balance in retained earnings is:
A. $343,000.
B. $213,000.
C. $293,000.
D. $297,500.
E. $301,000.
145.Fernwood Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available:
Retained earnings balance at the beginning of the year$233,000
Cash dividends declared for the year$50,000
Proceeds from the sale of equipment$85,000
Gain on the sale of equipment$4,500
Cash dividends payable at the beginning of the year$22,000
Cash dividends payable at the end of the year$30,000
Net income for the year$110,000
The amount of cash paid for dividends was:
A. $52,000.
B. $60,000.
C. $58,000.
D. $50,000.
E. $42,000.
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