Related to the Economics in Practice on Page 155: Which

question 13

Multiple Choice

Related to the Economics in Practice on page 155: Which of the following would be most likely to make it more efficient for delivery trucks to drive more quickly?

• A) an increase in the hourly wage of truck drivers and a decrease in the cost of gasoline
• B) an increase in the hourly wage of truck drivers and an increase in the cost of gasoline
• C) a decrease in the hourly wage of truck drivers and a decrease in the cost of gasoline
• D) a decrease in the hourly wage of truck drivers and an increase in the cost of gasoline

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Definitions:

Transfer Price

The price at which divisions of a company transact with each other, used for the transfer of goods and services within an organization.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace, determined by the forces of supply and demand.

Marginal Cost

The financial implication of producing an extra unit of a product or service.

Downstream Division

A segment of a business operation that focuses on the processing, marketing, and selling of finished products to consumers as opposed to raw material processing.