Suppose That There Is Not Enough Parking at an Urban

question 13

Multiple Choice

Suppose that there is not enough parking at an urban university.Sometimes students come to campus,spend a few minutes searching for a parking spot,and then decide that going to class isn't worth the effort of continuing to search for a spot and go home.Assume that all professors give midterm exams on the same day.You would expect the optimal time spent searching for a parking space on that day to __________ because __________.

• A)decrease;the marginal costs are higher.
• B)increase;the marginal costs are lower.
• C)increase;the marginal benefits are higher.
• D)decrease;the marginal costs are lower.

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Definitions:

Allowance Method

An accounting technique used to estimate and account for doubtful accounts receivable.

Uncollectible Accounts Expense

An expense reported on the income statement, pertaining to the debt owed to a company that is unlikely to be recovered.

Percentage Of Credit Sales

A method used to estimate bad debts expense, based on the percentage of sales made on credit that are expected to be uncollectible.

Allowance Method

An accounting technique used to estimate and account for bad debts, acknowledging that a certain percentage of sales or receivables may not be collected.