When an Economy Is Operating Efficiently, the Production of More

question 207

Multiple Choice

When an economy is operating efficiently, the production of more of one good will result in the production of less of some other good because

• A) consumers do not want more of both goods.
• B) resources are limited (scarce) and efficiency implies that all are already in use.
• C) the production possibilities curve shifts inward as more of one good is produced.
• D) technological improvement can only improve the production of a single good.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to update the accounts and ensure they reflect all revenues earned and expenses incurred during the period.

Deferred Revenue

Income received by a company for goods or services yet to be provided; recognized as a liability until the service or product is delivered.

Journal Entry

A record in accounting that represents a transaction where debits and credits are equal, documenting financial transactions in the ledger.