If a Good Has a Marginal Cost of Production of Zero

question 157

Multiple Choice

If a good has a marginal cost of production of zero and an inefficiently low level of consumption,the good must be a(n) :

• A)private good.
• B)public good.
• C)common resource.
• D)artificially scarce good.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update account balances before preparing financial statements.

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Journalized

The process of recording transactions in a journal before they are posted to the general ledger in accounting.

Income Summary Account

A temporary account used in the closing process that aggregates all income and expense accounts to determine net income or loss for a period.