An Economist at the University of Alaska at Anchorage Has

question 119

Multiple Choice

An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to assemble a scholarly answer, the professor should take which steps?

• A)​Develop a hypothesis, test the proposition by engaging in empirical analysis, and examine the data to see if it fits with the facts.
• B)​Gather data on crude oil prices and seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations.
• C)​Ask people in Alaska why they are not purchasing oil.
• D)​None of the above.The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.

Apply cost allocation principles to hypothetical expansions and assess their impact on departmental income statements and company overhead.

Understand and apply the concept of responsibility accounting and its impact on cost control and managerial performance evaluation.

Compute and understand the cash conversion cycle and its importance in managing working capital.

Calculate and analyze departmental contribution to overhead and the impact of direct and indirect expenses on departmental profitability.

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Definitions:

Bank Credit Cards

Financial instruments issued by banks allowing cardholders to borrow funds up to a pre-approved limit for purchases or cash advances.

Credit Card Expense

Costs incurred from using a credit card, including interest charges, annual fees, and transaction fees.

Sales

The total amount earned from selling goods or services before any costs or expenses are deducted.

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in the business-to-business market, often determined by quantity purchased or early payment.