Suppose That an Accountant for a Bank Notices a 5

question 38

Multiple Choice

Suppose that an accountant for a bank notices a 5 percent reduction in profits for a certain quarter of operations. The accountant identifies four sources of increased costs that might account for this: increased salaries for some of the employees, increased utility costs, new computers for one of the departments, and increased real estate taxes. After further study, the accountant finds that each of these is responsible for a 1 percent reduction in profits, which adds up to a total of 4 percent. Unable to account for the final 1 percent loss, the accountant attributes it to embezzlement by one of the employees. What method did the accountant use in drawing this conclusion?

• A) The method of agreement.
• B) The joint method of agreement and difference.
• C) The method of difference.
• D) The method of residues.
• E) The method of concomitant variation.

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good that consumers are willing to purchase at various prices.

Monopolistic Competitor

A market structure where many firms sell products that are similar but not identical, thereby having some control over their prices.

Represent

To be a sign or symbol of something; or to act on behalf of someone or something in a legal or formal context.

Monopolistically Competitive Firms

Monopolistically competitive firms operate in a market structure where many companies sell products that are similar but not identical, leading to some degree of market power.