Uncertainty About Inflation

question 150

Multiple Choice

Uncertainty about inflation:

• A)shifts the attention of business managers away from exchange rate movements and toward concerns about productivity.
• B)reduces the difficulty of making international business decisions.
• C)make suppliers link the selling prices of their goods to the overall inflation rate.
• D)undermines money's importance as a link between the present and the future.
• E)makes contracts easier to negotiate.

Identify the costs included and excluded in the inventory carrying cost.

Analyze the advantages of using perpetual inventory systems in specific business settings.

Estimate inventory holding gains or losses under FIFO earnings numbers.

Understand the computation of goods available for sale and its significance.

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Definitions:

Marginal Utility

The added delight or usefulness a person acquires by consuming an extra unit of a good or service.

Utility Theory

A concept in economics that suggests individuals make decisions based on the expected utility or satisfaction they will derive from those decisions.

Consumer Surplus

The disparity between what consumers are inclined and financially able to spend on a good or service compared to what they ultimately pay.

Marginal Utility

The boost in satisfaction or utility a person enjoys from consuming another unit of a good or service.