Steel Is an Important Input to the Production of Cars

question 150

Multiple Choice

Steel is an important input to the production of cars.Tires and cars are used together by consumers.What will occur in the market for tires when there is an increase in the price of steel?

• A)Price rises; quantity rises.
• B)Price falls; quantity rises.
• C)Price rises; quantity falls.
• D)Price falls; quantity falls.
• E)No change in price or quantity occurs.

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Definitions:

Continuous Flow

A production method used to manufacture, produce, or process materials without interruption.

Production Activity

The process of transforming raw materials into finished goods or services.

Work in Process

Goods that are in various stages of production within a manufacturing process but are not yet completed products.

FIFO Method

"First-In, First-Out," an accounting method for valuing inventory that assumes the first items purchased or produced are the first ones sold.