A Turnip Is an Inferior Good If

question 181

Multiple Choice

A turnip is an inferior good if

• A)an increase in the price of a turnip decreases the quantity of turnips that consumers want to buy.
• B)an increase in income decreases the demand for turnips.
• C)an increase in income increases the demand for turnips.
• D)turnips violate the law of demand.
• E)turnips are a low quality good.

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Definitions:

Standard Material Requirement

The predetermined amount of materials specified for the production of a single unit of product, often used in budgeting and controlling costs.

Standard Cost

A predetermined or budgeted cost of manufacturing a product or performing a service, used as a benchmark to measure performance.

Direct Materials Quantity Variance

The difference between the actual quantity of direct materials used in production and the standard quantity expected, multiplied by the standard cost per unit.

Direct Materials Price Variance

It measures the difference between the actual cost and the standard cost of direct materials used in production, indicating how effectively a company is purchasing its raw materials.