If a Factor of Production Has No Production Cost and Has

question 120

Multiple Choice

If a factor of production has no production cost and has a fixed supply, then payments to that factor constitute what economists call

• A)abnormal profits.
• B)economic rent.
• C)normal profits.
• D)interest payments.

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Definitions:

Individual Balances

The amounts recorded in separate accounts representing various assets, liabilities, or equity of an individual or entity.

Special Journal

A specialized accounting journal designed to record a particular type of transaction consistently, such as sales or cash disbursements.

General Journal

A book or document where all financial transactions of a business are initially recorded, prior to being transferred to specific accounts in the general ledger.

Internal Transactions

Financial transactions that occur within an entity, affecting its internal accounts without involving external parties.