Economies of Scope

question 33

Multiple Choice

Economies of scope:

• A)are related to the average cost of producing a good when you double the scale of output.
• B)are higher the more specialized a firm is in production.
• C)means the rotation of the long-run total cost curve in a downward direction.
• D)are a production characteristic in which the total cost of producing given quantities of two goods in the same firm is less than the total cost of producing those quantities in two single-product firms.

---

Definitions:

Closing Entry Process

The procedure at the end of an accounting period to prepare the accounts for the next period by clearing out revenues and expenses into the Retained Earnings account.

Temporary Accounts

Accounts used to collect information during a single accounting period, which are then transferred to permanent accounts at the end of the period.

Permanent Accounts

Accounts that carry their ending balances over into the next accounting period; these include asset, liability, and equity accounts.

Prepaid Rent

Prepaid Rent represents payments made in advance for rent, which is recorded as an asset on the balance sheet and expensed over time as it is used.