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Accounting Study Guide
BUS 475 Final Exam Study Guide

1. The reason economists and accountants have problems using cost analysis in the real world is that

although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions

although explicit costs do not show up in accounting profits, they nevertheless affect managerial decisions

economists do not believe in the existence of explicit costs expilcit costs cannot be measured

Explanation: Implicit costs occur when an asset is used internally, rather than for direct cash flow. These costs affect decisions, but cannot be quantitatively measured.

2. The ____ as the number of levels in the organizational hierarchy increases.

span of control expands

span of control narrows

scope of influence narrows

scope of influence expands

Explanation: A Narrow Span of control leaves a single manager or supervisor with very few subordinates, which will lead to additional levels in the organizational hierarchy.

3. From the point of view of consumer surpluses and producer surpluses, what problem was created when Thailand subsidized the cost of energy to consumers to help alleviate the burden of higher energy costs?

It hurt the poor and benefitted the rich.
It led to less fuel being used than the amount that maximizes consumer surplus
It has no effect; consumers gained a consumer surplus, but taxpayers lost the same amount because they had to finance the subsidy

It encouraged the consumption of too much fuel at the expense of other goods.

Explanation: Anytime a good is subsidized, its consumption increases.

4. An argument consists of two parts· the fact and the rebuttal

the premise and the conclusion

the point and the conclusion

the subject and the outcome

5. Why do some stores offer senior citizen discounts on Tuesdays?

Most stores are perfect competitors in their geographic region.
Senior citizens have perfectly inelastic demand curves, whereas other shoppers do not.

Senior citizens have more

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