Answer:
The correct answer is option A.
Explanation:
Recession in an economy means that the economic activities are reduced. During recession aggregate demand gets reduced.
When the recession is announced the firms will realize that the demand for their products must have been reduced. To reduce the cost of production the firms will reduce the wages paid to the workers.
This will further reduce the income and the demand for products.
Answer: a. always declines with increased levels of output.
Explanation: the average fixed cost curve graphically illustrates or shows the relation between average fixed cost a firm incurs in the short-run production of a good or service, and the quantity produced. The average fixed cost curve always declines with increases in the level of output resulting in a negatively sloped curve. This is to say that the average fixed cost is relatively high at smaller quantities of output, which then declines as the level of production increases--the more output increases, the more average fixed cost declines. Why this occurs is that a given fixed cost is spread over an increasingly larger quantity of output and as such, firms can profitably charge a lower price with increased output.
Answer:
A) production is determined by the interaction of supply and demand.
Explanation:
A pure market economy is an economy where production decisions are made by the forces of demand and supply. there is no intervention of the government in production decisions
Characteristics of a pure market economy
- Private ownership of means of production
- freedom of choice. Producers are free to produce what they desire
- competition among producers
- no government intervention.
Answer:
Explanation:
The journal entries are shown below:
a. Depreciation Expense A/c Dr $4,710
To Accumulated Depreciation - Office equipment A/c $4,710
(Being depreciation expense is recorded)
The depreciation expense is calculated for eight months (January - August)
b. Cash A/c Dr $21,240
Accumulated Depreciation - Office equipment A/c Dr $40,180
Loss on Disposal of Office equipment A/c Dr $25,130
To Office equipment A/c $86,550
(Being sale of machinery is recorded and the remaining balance is debited to the Loss on Disposal of Office equipment A/c)
The accumulated depreciation is computed below:
= $35,470 + $4,710
= $40,180