A Friend Says, "I Really, Really Need a New Car

question 316

Multiple Choice

A friend says, "I really, really need a new car." As an economist, you're thinking

• A) Right! Everyone needs a new car.
• B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car.
• C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want.
• D) that a new car can only be considered a need if at least 51% of the public agrees.

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Definitions:

Prepaid Insurance

Payments made for insurance coverage before the coverage period begins, recorded as an asset on the balance sheet.

Corrected Trial Balance

A list of all the account titles and balances of a company after adjustments and corrections have been made.

Normal Balance

The side (debit or credit) of an account that is typically increased, indicating its usual positive balance in accounting.

Account Type

Refers to classifications made for various financial transactions in accounting, such as assets, liabilities, equity, revenue, and expenses.