When the Price of a Commodity Rises, We Can Expect

question 124

Multiple Choice

When the price of a commodity rises, we can expect

• A)marginal utility of the last unit purchased will rise.
• B)marginal utility of the last unit purchased will fall.
• C)marginal utility of the last unit purchased will be unaffected.
• D)purchases to rise because of the increased marginal utility.

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Definitions:

Economic Conditions

The state of an economy at a given time, encompassing factors like inflation, employment rates, GDP growth, and overall market prosperity or decline.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period of time, often used for managing liquidity.

Capital Budget

An estimate of the cost of an organization's major investments or projects, analyzing the potential returns and expenditures.

Accruals

The accounting process of recognizing revenues and expenses when they are incurred, regardless of when cash transactions occur.