A Promissory Note

question 56

Multiple Choice

A promissory note

• A)is not a formal credit instrument.
• B)may be used to settle an account receivable.
• C)has the party to whom the money is due as the maker.
• D)cannot be factored to another party.

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Definitions:

Total Costs

refer to the sum of all the expenses involved in producing a good or service, including both fixed and variable costs.

Profit Maximizes

The process by which a company establishes the price and volume of output that leads to the maximum profit.

Deadweight Loss

The reduction in total surplus that results from a market distortion, such as a tax or subsidy, signaling inefficiencies in allocation of resources.

Socially Optimal Level

A state at which the allocation of resources maximizes social welfare, often where marginal social benefit equals marginal social cost.