Which of the Following Methods of Computing Depreciation Is Production

question 167

Multiple Choice

Which of the following methods of computing depreciation is production based?

• A) Straight-line
• B) Declining-balance
• C) Units-of-activity
• D) None of these answer choices are correct.

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Definitions:

Long-Run Adjustments

The process by which firms adjust their production levels, input mixes, and operations to reflect changes in the market or economic conditions over a longer period.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in other words, every good or service is produced up to the point where the last unit provides a utility level equal to the cost of producing it.

Marginal Benefit

The incremental enjoyment or advantage received from the consumption or creation of one more unit of a good or service.

Minimum Price

The lowest price at which a product or service can be sold, often regulated by governmental policies or agreements to ensure fair competition and to protect consumers or producers.