If One Day It Was Discovered That Lime Juice Caused

question 75

Multiple Choice

If one day it was discovered that lime juice caused cancer, which of the following would likely result?

• A) The supply curve for lime juice would shift to the right.
• B) The supply curve for lime juice would shift to the left.
• C) The demand curve for lime juice would shift to the right.
• D) The demand curve for lime juice would shift to the left.

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Definitions:

Cost of Goods Sold

Direct costs attributable to the production of goods sold by a company, including material, labor, and manufacturing overhead expenses.

Ending Inventory

Merchandise value ready for sale at the close of an accounting cycle.

Consistency Principle

An accounting standard that mandates entities to apply the same accounting methods and practices from period to period.

Expense Recognition Principle

This principle dictates that expenses should be recognized in the accounting period when they are incurred, not necessarily when they are paid, matching expenses to the revenues they help generate.