Table 11-1 -Refer to Table 11-1

question 134

Multiple Choice

Table 11-1
$\begin{array}{|c|c|c|}\hline \text { Quantity } & \begin{array}{c}\text { Price } \\\text { (dollars) }\end{array} & \begin{array}{c}\text { Total Revenue } \\\text { (dollars) }\end{array} \\\hline 1 & \$ 7.50 & \$ 7.50 \\\hline 2 & 7.00 & 14.00 \\\hline 3 & 6.50 & 19.50 \\\hline 4 & 6.00 & 24.00 \\\hline 5 & 5.50 & 27.50 \\\hline 6 & 5.00 & 30.00 \\\hline\end{array}$
-Refer to Table 11-1.What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?

• A) output effect = $3.00; price effect = $0.50
• B) output effect = $1.50; price effect = $2.00
• C) output effect = $5.50; price effect = -$2.00
• D) output effect = $4.00; price effect = -$0.50

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Definitions:

Transposition

The error of switching the order of digits in numbers, often leading to inaccuracies in financial or data records.

General Ledger

A comprehensive record of all financial transactions over the life of a company, used to prepare financial statements.

Nominal Account

An accounting ledger account that starts each new accounting period with a zero balance and ends with a closed balance to transfer to a real account.

Retained Earnings

Retained Earnings represent the cumulative amount of net income earned by a company that has not been distributed to shareholders as dividends.