If Two Goods Are Substitute Goods

question 104

Multiple Choice

If two goods are substitute goods,

• A)The percentage change in quantity demanded for good X will fall if there is a reduction in price of good Y.
• B)The percentage change in quantity demanded for good X will stay the same if there is an increase in the price of good Y.
• C)If the price of good X increases,the demand for good Y falls.
• D)The percentage change in quantity demanded for good X will rise if there is a reduction in the price of good Y.

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Definitions:

Credit Sales

Transactions where goods or services are provided to a customer with the agreement that payment will be made at a later date.

Uncollectible

Refers to accounts receivable that are considered to be uncollectable and are thus written off as a bad debt expense.

Cash Receipts

The collection of money (currency, checks, wire transfers) by a business from its customers or other parties.

Inventory Purchases

The total cost associated with buying goods and materials kept in stock for the purpose of resale or production in a given period.