In Each of the Following Situations, Identify the Relevant Economic

question 22

Essay

In each of the following situations, identify the relevant economic principle and explain how it applies.
a) Larissa has lived in her own house for many years. However, rents have recently increased so much that Larissa considers moving into a smaller house and renting out her own.
b) Tashonna is a talented singer and she strongly wants to pursue an artist's career. However, she is two years short of graduating from law school. She is certain she will never be a lawyer because she does not like it and has no gift to be a lawyer. However, her family insists she finish her studies, since she has already spent so much time and money on law studies. What should she do?
c) There are a few industrial sites in town, producing essential goods and services for the residents and providing the citizens with vital jobs. However, the businesses, including an airport in the very downtown, also produce pollution, congestion, and noise. People understand the blessings of economic and civil freedoms and are pleased and proud to have productive activities in their town. They started, though, to crave for a more pleasant place to live in. What economic principle can give these people some guidance about what to do?

Understand the principles of accrual basis accounting and how it differs from cash basis accounting.

Identify and explain the four basic types of accounts that require adjusting entries.

Determine the necessity and process for updating accounts at the end of the period.

Match types of accounts with related business transactions.

---

Definitions:

Psychological Support

Emotional and mental assistance provided to individuals dealing with stress, trauma, or mental health issues to improve their coping mechanisms.

Terminal Illness

A disease or condition that is considered incurable and likely to lead to death within a relatively short period of time.

Bowlby's Attachment Theory

A psychological model proposing that the bond formed between children and their caregivers affects personal development and future relationships.

Motor Vehicle Accident

An incident involving a collision between one or more vehicles, often resulting in property damage, injury, or death.