Four Joint Operators Agree to an Arrangement in Which They

question 22

Multiple Choice

Four joint operators agree to an arrangement in which they have an equal share in a joint operation that produces sunflower oil. The work undertaken in setting up the joint operation cost $200 000 and each operator contributed in cash. Each operator will need to recognise the following accounting entry:

• A) DR Cash in JO $50 000 CR Cash $50 000
• B) DR Inventories in JO $50 000 CR Cash $50 000
• C) DR Cash in JO $200 000 CR Cash $200 000
• D) DR Cost of joint operation product $200 000 CR Cash $200 000

Comprehend how market equilibrium is achieved and its significance to total surplus.

Identify factors leading to market failure and understand their implications on surplus and market efficiency.

Understand the role of property rights in effective market functioning and their impact on market outcomes.

Describe scenarios where government intervention affects surplus distribution and market efficiency.

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Definitions:

Playa

A flat-bottomed desert basin that temporarily becomes a shallow lake after rainfall.

Alluvial Fan

A conical-shaped deposit of sediment, typically found at the base of mountain ranges, created as flowing water loses energy and drops its load of solids.

Desert Wash

Dry streambeds in desert environments that temporarily fill with water during rainstorms.

Playa

A flat-bottomed desert basin that temporarily becomes a lake after heavy rain but reverts to a dry lakebed as the water evaporates.