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NEW QUESTION 33
After a new report concludes that airplane exhaust has a negative impact on the environment, a government regulation is introduced which reduces the number of flights airlines can make in a day by 10 percent. To comply with this regulation, a certain airline halves the frequency of flights on several of its routes but maintains its original fleet of airplanes. What happens to the costs for the airline?
- A. Total costs will fall by 10 percent.
- B. Total costs for the airline will increase.
- C. Average cost per flight will increase.
- D. Cost for each additional flight will increase.
Answer: C
NEW QUESTION 34
In which of the following scenarios would both the price and quantity sold of paperback books decrease?
- A. The government passes new environmental regulations that increase the price of paper.
- B. Printers develop processes that significantly decrease their costs.
- C. The price of e-books, a substitute for paperback books, decreases.
- D. The price of bookmarks, a complementary good to paperback books, decreases.
Answer: C
NEW QUESTION 35
Which of the following pieces of information can be determined by looking at an income statement?
- A. The amount of pretax profit or loss during the accounting period
- B. The change in cash position during the accounting period
- C. The amount of tax paid during the accounting period
- D. The increase or decrease in owner’s equity for the accounting period
Answer: A
NEW QUESTION 36
Accounting standards establish that companies should depreciate a long-lived physical asset, because:
- A. It is an explicit transaction beyond the current period.
- B. Costs should be matched with the benefits that are realized over multiple periods.
- C. Assets lose value in the long term.
- D. Not all assets are paid in cash at the time they are purchased.
Answer: B
NEW QUESTION 37
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