If the Price of Apples Falls and the Price of Oranges

question 172

Multiple Choice

If the price of apples falls and the price of oranges remains constant:

• A) apples are now relatively cheaper.
• B) the fall in the price of apples made consumers richer.
• C) the fall in the price of apples, ceteris paribus, makes the marginal utility of apples divided by their price exceed the marginal utility of oranges divided by their price.
• D) all of the above statements are true.

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Definitions:

Deferred Tax Assets

Assets on a company's balance sheet that may be used to reduce future tax liability.

Deferred Tax Liabilities

Future tax obligations due to temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements.

GAAP

Stands for Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States for financial reporting.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is gaining global acceptance.