On 31 December 2013 a New Motor Vehicle with a Useful

question 51

Multiple Choice

On 31 December 2013 a new motor vehicle with a useful life of 5 years and an estimated residual value of $5,000 was purchased by a business at a cost of $25,000. The amount of depreciation expense charged for the six months ended 30th June 2014, using the straight-line method, is:

• A) $25,000
• B) $2,000
• C) $4,000
• D) nil.

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Definitions:

Efficiency Wages

Wages set above the equilibrium level by employers to increase worker productivity, discourage turnover, and reduce shirking.

Efficiency-Wage Theory

A theory suggesting employers pay above the market equilibrium wage to increase worker productivity.

Economic Theory

The study of how societies use scarce resources to produce valuable commodities and distribute them among different people.

Natural Rate

Refers to the level of unemployment when the labor market is in equilibrium, accounting for frictional and structural unemployment but not cyclical unemployment.