A Temporary Factor-Price Differential Is One Which

question 93

Multiple Choice

A temporary factor-price differential is one which

• A)will tend to be eliminated in the long run.
• B)will hamper the reallocation of resources from declining to growing industries.
• C)derives from intrinsic differences in the factors themselves.
• D)will reflect a permanent state of disequilibrium.
• E)is seldom self-eliminating.

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Definitions:

Bad Debt Expense

An estimated expense recognized by businesses for accounts receivable that are considered unlikely to be collected.

Salvage Value

The projected value of an asset when it reaches the end of its operational lifespan.

Useful Life

The estimated time period an asset is expected to be used by a company before it is no longer useful or becomes obsolete.

Double-Entry System

An accounting system where each transaction is entered twice, as a debit in one account and a credit in another, to ensure the accounting equation is always balanced.