The Graph Illustrates the Demand for Peanuts

question 86

Multiple Choice

The graph illustrates the demand for peanuts. Peanuts are a normal good because

• A) the demand curve shows that, if the price of peanuts rises, there is a movement along the demand curve to a lower quantity demanded.
• B) peanuts have both substitutes and complements.
• C) the demand for peanuts increases when the price of one of its substitutes rises.
• D) the demand curve for peanuts slopes downward.
• E) the demand for peanuts increases when income increases.

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Definitions:

FOB Shipping Point

A term used in shipping indicating that the buyer assumes responsibility for the goods and shipping costs the moment the goods leave the seller's premises.

Merchandise Inventory

Goods and products that a firm holds with the intent to sell them as part of its business operations; considered a current asset on the balance sheet.

Perpetual Inventory System

A method for accounting inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

MasterCard

A multinational financial services corporation that facilitates electronic funds transfers globally, primarily through its branded credit and debit cards.