A Fall in the Price of 7-UP That Causes a Household

question 196

Multiple Choice

A fall in the price of 7-UP that causes a household to shift its purchasing pattern away from Sprite and toward 7-UP is the ________ effect of a price change.

• A) income
• B) substitution
• C) complementary
• D) diminishing marginal utility

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Definitions:

Direct Labor Rate

The cost of the work done by those employees who directly manufacture the products, usually measured per hour.

Direct Materials Cost

The expense associated with acquiring raw materials that are directly utilized in the manufacture of goods.

Traditional Costing

Traditional costing is an accounting method that allocates manufacturing overhead based on volume-related measures, such as direct labor hours or machine hours.

Production Orders

Instructions for manufacturing a certain number of products, detailing the materials, components, and assembly or production processes required.