Which of the Following Statements Is FALSE

question 3

Multiple Choice

Which of the following statements is FALSE?

• A) pipeline capital costs are high in comparison with other modes
• B) air cargo is generally used for low value bulky items
• C) truck transport is suitable for distribution of small volume goods to a dispersed market
• D) water transport is slower than rail
• E) rail transport is more suited to bulky low value items than road transport.

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Definitions:

Perfect Complements

Goods that are always consumed together in fixed proportions because their consumption provides utility only when combined, such as left and right shoes.

Income Effect

The change in an individual's consumption choices that results from a change in their real income or purchasing power.

Substitution Effect

The substitution effect occurs when consumers replace cheaper items for more expensive goods due to changes in relative prices, holding utility constant.

Slutsky Compensated Demand Curve

Represents consumer demand by adjusting for changes in purchasing power, illustrating how quantity demanded varies with price, holding utility constant.