Which of the Following Is an Example of a Permanent

question 40

Multiple Choice

Which of the following is an example of a permanent resource price differential?

• A)When the price of oil increases, oil exploration increases.
• B)When the price of CDs falls, CD production decreases.
• C)When demand for land in a city increases, its price increases above prices of land elsewhere.
• D)When demand for computer programmers increased, more people went into that field.
• E)When the price of oil rose, demand for solar panels increased.

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Definitions:

Income Tax Purposes

Pertains to considerations or actions taken in the context of calculating tax liability on income.

Financial Reporting

The practice of creating reports that reveal the financial condition of a company to its management, investors, and governmental bodies.

LIFO Inventory Method

An accounting method that assumes the most recently produced items are sold first and uses those costs for accounting.

Increasing Unit Costs

Refers to a situation where the expenses associated with producing each additional unit of a product or service rise over time.