Two Goods Are Substitutes If

question 47

Multiple Choice

Two goods are substitutes if:

• A) an increase in the price of one leads to a shift to the left in the demand curve for the other.
• B) an increase in the price of one leads to an increase in demand for the other.
• C) an increase in the price of one will increase the supply of the other.
• D) a fall in the price of one leads to a reduction in supply for the other.

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Definitions:

Capital Budgeting

The process of evaluating, comparing, and selecting the best projects to invest in to maximize a firm’s value, considering long-term investments.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity and operational efficiency of the business.

Straight-Line Depreciation

A system for distributing the expense of a material asset across its lifespan in equal yearly payments.

Working Capital

A financial metric representing the difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.