BUS 475 11-20
11) The cost of an asset and its fair market value are __________.
A. the same on the date of acquisition
B. never the same
C. the same when the asset is sold
D. irrelevant when the asset is used by the business in its operations
12) One of Astro Company\'s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
13) The cost principle is the basis for preparing financial statements because it is __________.
A. the most accurate measure of purchasing power
B. a conservative value
C. relevant and objectively measured, and verifiable
D. an international accounting standard
14) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Additional information
B. Adjusted trial balance
C. Comparative balance sheets
D. Current income statement
15) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to __________.
A. cooperate rather than compete with each other
B. collude with each other
C. form various degrees of cartels
D. compete rather than cooperate with each other
16) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms\' production levels as given. Then in equilibrium the output effect __________.
A. can be larger or smaller than the price effect
B. must dominate the price effect
C. must be smaller than the price effect
D. must balance with the price effect
17) The price of a good that prevails in a world market is called the
A. world price.
B. absolute price.
C. relative price.
D. comparative price.
18) A country\'s consumption possibilities frontier can be outside its production possibilities frontier if __________.
A. the country imports more than it exports
B. the country’s technology is superior to the technologies of other countries
C. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries
D. the country engages in trade
19) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. double the quantity supplied
B. less than quantity supplied
C. greater than quantity supplied
D. equal to quantity supplied
20) If a binding price ceiling were imposed in the computer market, __________.
A. the quality of computers would increase
B. the supply of computers would decrease
C. the demand for computers would increase
D. a shortage of computers would develop