In Each of the Following Situations,identify the Relevant Economic Principle

question 143

Essay

In each of the following situations,identify the relevant economic principle and explain how it applies.
a) Peter has lived in his own apartment for many years.However,rents have recently increased so much that Peter considers moving into a smaller apartment and renting out his own.
b) Alfonso is a talented singer and he strongly wants to pursue an artist's career.However,he is two years short of graduating from law school.He is certain he will never be a lawyer because he does not like it and has no gift to be a lawyer.However,his family insists he finish his studies,since he has already spent so much time and money on law studies.What should he do
c) There are a few industrial sites in town,producing essential goods and services for the residents and providing the citizens with vital jobs.However,the businesses,including an airport in the very downtown,also produce pollution,congestion,and noise.People understand the blessings of economic and civil freedoms and are pleased and proud to have productive activities in their town.They started,though,to crave for a more pleasant place to live in.What economic principle can give these people some guidance about what to do

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Definitions:

Bad Debts Expense

An expense account reflecting estimated uncollectible accounts receivable.

Percent of Sales Method

A forecasting technique used in finance to predict future variables such as assets, liabilities, and expenses, based on projected sales figures.

Uncollectible

Refers to accounts receivable that a company has determined cannot be collected from customers.

Aging of Accounts Receivable Method

An accounting technique used to estimate the amount of uncollectable accounts receivable based on their age.