A Fall in the Price of Potatoes,which Are Used in the Production

question 163

Multiple Choice

A fall in the price of potatoes,which are used in the production of french fries,will

• A)lead to a decrease in the supply of french fries,causing the supply curve of french fries to shift to the left.
• B)have no effect on the supply of french fries.
• C)have no effect on the supply of french fries but cause a movement along the supply curve of french fries.
• D)lead to a decrease in the demand for french fries.
• E)lead to an increase in the supply of french fries,causing the supply curve of french fries to shift to the right.

---

Definitions:

Political Cost Hypothesis

A theory suggesting that larger firms are more likely to be subject to government scrutiny and regulation, thus incurring additional costs to comply with political expectations.

Political Costs

Wealth transfers imposed on the entity, resulting from political processes.

Accounting Policies

Specific convictions, understructures, modes, prescriptions, and regimens enacted by an entity for the generation and proclamation of financial analyses.

Market Efficiency

The concept that all available information is fully reflected in securities' prices, making it impossible to consistently achieve higher returns without taking on additional risk.