Natalie Operates on a Pretty Tight Budget

question 82

Multiple Choice

Natalie operates on a pretty tight budget.She is a price-conscious shopper and usually buys store or generic brands to save money.Recently,however,Natalie was given a pretty substantial raise.As such,she has altered her shopping patterns and now regularly buys more expensive,name-brand goods.This is an example of

• A) the substitution effect.
• B) the price inelasticity coefficient.
• C) the income effect.
• D) the target return effect.
• E) cross-price elasticity.

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Definitions:

Activity Variance

The difference between the planned activity level and the actual activity level, used in budgeting and costing analyses.

Materials

Raw resources or supplies used in the production of finished goods.

Revenue

The total income generated by a company from its usual business activities, usually from the sale of goods and services to customers.

Spending Variance

A financial metric that indicates the difference between the budgeted or planned amount of spending and the actual amount spent.