On December 31, 2011, the Payee on a $4,500, 120-Day

question 32

Multiple Choice

On December 31, 2011, the payee on a $4,500, 120-day, 10% note dated November 1, 2011, will recognize: (Use a 365 day year and round to the nearest dollar.)

• A)Interest Receivable, $148.
• B)Interest Receivable, $74.
• C)Interest Payable, $148.
• D)Interest Payable, $74.

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Definitions:

Output Effect

The effect that changes in the price level have on production due to the incentive for producers to increase supply when the price is higher.

Profit-maximizing

The method a company uses to identify the pricing and production volume that maximizes profit.

Marginal Product

The additional output that is produced by using one more unit of a factor of production, all else held constant.

Elasticity

Elasticity measures the responsiveness of the quantity demanded or supplied of a good or service to a change in its price or other factors like income.