Prince Sells a Certain Product for $20, 000 $\begin{array} { c c } \text { Unearned Warranty Revenue } & 25,000 \\\text { Warranty Revenue } & 25,000\end{array}$

question 7

Multiple Choice

Prince sells a certain product for $20, 000.Included in this price is an implied service contract of $800.Fifty machines were sold in 2010.Warranty expense incurred during 2010 amounted to $25, 000.The company uses the sales warranty accrual method.Which entry would probably not be made in 2010?

• A)
• \(\begin{array} { c c }
• \text { Unearned Warranty Revenue } & 25,000 \\
• \text { Warranty Revenue } & 25,000
• \end{array}\)
• B)
• \(\begin{array} { l c r }
• \text { Cash } & 1,000,000 \\
• \text { Sales } & 960,000 & \\
• \text { Unearned Warranty Revenue } & 40,000
• \end{array}\)
• C)
• \(\begin{array} { l l }
• \text { Cash } & 40,000 \\
• \quad \text { Warranty Revenue } & &40,000
• \end{array}\)
• D)
• \(\begin{array} {lc }
• \text { Warranty Expense } & 25,000 \\
• \text { Cash } & 25,000
• \end{array}\)

Distinguish between monopoly and monopsony power in markets.

Calculate deadweight loss, consumer surplus, and producer surplus in monopoly markets.

Understand the economic rationale for government intervention in natural monopolies.

Apply economic theory to recommend regulatory policies for monopolies.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.