At the End of the First Year of Operations, the Total

question 116

Multiple Choice

At the end of the first year of operations, the total cost of the trading debt securities portfolio is $245,000. Total fair value is $250,000. The financial statements should show

• A) an addition to an asset of $5,000 and a realized gain of $5,000.
• B) an addition to an asset of $5,000 and an unrealized gain of $5,000 in the stockholders' equity section.
• C) an addition to an asset of $5,000 in the current assets section and an unrealized gain of $5,000 in "Other revenues and gains."
• D) an addition to an asset of $5,000 in the current assets section and a realized gain of $5,000 in "Other revenues and gains."

Differentiate between normative and positive economic statements.

Recognize the role of economists in storytelling to clarify economic theories and models.

Identify the characteristics of rational behavior in economic models.

Comprehend the function and importance of hypotheses in economic studies.

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Definitions:

Tuition

The fee for instruction at a school, university, or college.

Room And Board

The combined cost of housing (room) and food/meals (board) typically for students living on a college campus.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, a fundamental concept in economics.

Real Cost

The total cost of manufacturing or providing a service, including all direct and indirect costs.