(Consider This) When the Federal Government Started Requiring Restaurants to Print

question 17

Multiple Choice

(Consider This) When the federal government started requiring restaurants to print calorie counts next to menu items,

• A) restaurants changed their prices, systematically lowering prices for healthier items and raising prices for high-calorie entrees.
• B) there was no meaningful change in consumption behavior, indicating that marginal utility is driven solely by tastes for the food items and not by health information.
• C) consumption of higher calorie items decreased, suggesting consumers' marginal utility for these items dropped.
• D) consumption of higher-calorie items increased, contrary to the law's objective.

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Definitions:

Contra-Asset Accounts

Accounts on a balance sheet that have a balance opposite to the normal balance of an associated account, used to lower the value of the associated assets (e.g., accumulated depreciation).

Sales Discounts

A reduction in the price of goods or services sold, offered by the seller as an incentive to buyers.

Cash Flow

The net amount of cash and cash-equivalents being transferred into and out of a business.

Merchandisers

Businesses that purchase goods for resale at a profit, dealing primarily in tangible products that are marketed to consumers or other businesses.