The Figure Given Below Shows the Market for Computers in the U.S

question 25

Multiple Choice

The figure given below shows the market for computers in the U.S. The domestic price line inclusive of the tariff lies above the international price line. D_d and S_d are the domestic demand and supply curves of computers respectively. Under free-trade the U.S. imported _____ computers, but following the imposition of the tariff the U.S. began to import _____ computers.

• A)100,000; 70,000
• B)70,000; 100,000
• C)200,000; 190,000
• D)90,000; 100,000

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Definitions:

Aging

A method used in accounting to categorize accounts receivables based on the length of time an invoice has been outstanding.

Allowance Account

An account used in accounting to reduce the value of accounts receivable to a more realistic amount by accounting for potential bad debts.

Uncollectibles

Debts owed to a company that are considered unlikely to be recovered or paid.

Aging of Receivables

The process of categorizing accounts receivable by their due dates to estimate bad debt expenses.