The Relationship Governing the Intraindustrial and Interindustrial Sales and Purchases

question 17

Multiple Choice

The relationship governing the intraindustrial and interindustrial sales and purchases of four basic industries - agriculture (A) , manufacturing (M) , transportation (T) , and energy (E) - of a certain economy is given by the following input-output matrix. A M T E How many units of energy are required to produce 5 units of all goods in the economy?

• A) 2.3 units
• B) 2.5 units
• C) 2.9 units
• D) 3.2 units

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Definitions:

Avoidable Costs

Costs that can be eliminated if a particular decision is made, such as discontinuing a product line.

Irrelevant Costs

Costs that will not be affected by a decision and therefore should not be considered when making that decision.

Asset

Resources owned or controlled by a business that are expected to provide future economic benefits.

Original Cost

The initial price paid or cost of acquisition of an asset, before any depreciation, amortization, or impairment costs are deducted.