The Following Table Illustrates Alternative Production Techniques for Producing 18

question 179

Multiple Choice

The following table illustrates alternative production techniques for producing 18 widgets that can be sold for $1 each for a total revenue of $18. Using technique A will result in an

• A) economic loss of $2.
• B) economic profit of $1.
• C) economic profit of $2.
• D) economic profit of $3.

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Definitions:

Debit

A financial record that elevates an asset or expense account, or lessens a liability or equity account.

Double-entry Accounting

An accounting method where every financial transaction results in equal and opposite effects in at least two different accounts.

Ledger

A book or collection of financial accounts where all transaction records are summarized and recorded.

Journal

A book or digital record where all financial transactions are initially recorded in chronological order before being posted to accounts in the ledger.