Exhibit 3-1 -Consider the Market Represented by the Schedule in Exhibit 3-1

question 97

Multiple Choice

Exhibit 3-1
-Consider the market represented by the schedule in Exhibit 3-1. At equilibrium,

• A)there is a surplus of 500 units.
• B)there is a shortage of 500 units.
• C)the market price is $4 per unit.
• D)the market price is $1 per unit and the quantity traded is 100 units.
• E)500 units are traded at a price of $3 per unit.

---

Definitions:

Credit Cash

An accounting entry that decreases the cash balance in the company’s books, often as a result of paying out cash for expenses or liabilities.

Accounts Payable

Liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance based on the accounting equation; assets and expenses normally have a debit balance, while liabilities, equity, and revenue normally have a credit balance.