Economists Make Assumptions in Order to

question 113

Multiple Choice

Economists make assumptions in order to

• A) mimic the methodologies employed by other scientists.
• B) minimize the number of experiments that yield no useful data.
• C) minimize the likelihood that some aspect of the problem at hand is being overlooked.
• D) focus their thinking on the essence of the problem at hand.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before accounting for other expenses, indicating the fundamental profitability of a company's products or services.

Total Current Assets

The sum of all assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Cash Collection

The process of gathering all cash received from sales, services, and other sources.

Bad Debt Expense

The cost associated with accounts receivable that a company is unable to collect from its debtors.