According to Your Textbook, Business Managers Prefer To

question 93

Multiple Choice

According to your textbook, business managers prefer to:

• A) Report as much income as possible for book and tax purposes.
• B) Report as much income as possible for book purposes and as little income as possible for tax purposes.
• C) Report as little income as possible for book and tax purposes.
• D) Report the same amount of income for book and tax purposes.

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Definitions:

Ownership Of Scarce Inputs

The possession and control over resources that are limited in nature and necessary for production.

Network Externalities

The effect that one user of a good or service has on the value of that product to other people, where the value increases as the number of users rises.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Natural Monopoly

A monopoly that exists when increasing returns to scale provide a large cost advantage to having all output produced by a single firm.