In a Free Market, a Given Unit of an Input

question 55

Multiple Choice

In a free market, a given unit of an input will be used by the firm that

• A)earns the largest addition to total profit from the use of that unit of input.
• B)has the lowest marginal cost of producing another unit of output.
• C)sells its output for the highest price.
• D)earns the largest total profit.

---

Definitions:

Adjusting Entry

A financial transaction documented at the close of an accounting cycle to apportion income and costs to the suitable period.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, reflecting wear and tear.

Adjustments

Corrections or changes made to the book balances of accounts to reflect more accurate values in financial accounting.

Payroll

The total amount of wages, salaries, and other earnings that a company pays to its employees.