The Change in Consumption That Results When a Price Change

question 183

Multiple Choice

The change in consumption that results when a price change moves the consumer along a given indifference curve to a point illustrating the new marginal rate of substitution is called the

• A)income effect.
• B)substitution effect.
• C)Giffen good effect.
• D)inferior good effect.

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Definitions:

Petty Cash Fund

A petty cash fund is a small amount of cash kept on hand by a business for making immediate payments for minor expenses, managed through a petty cash system.

Cash Shortage

A situation where the actual cash on hand is less than the expected amount, often due to errors, theft, or mismanagement.

Replenishment

The process of refilling inventory or stock to ensure adequate levels for ongoing operations or sales demands.

Journal Entry

An accounting record of a business transaction in the accounting books, including information such as the date of the transaction, amounts, accounts affected, and a brief description.