If Technology, A, Increases Permanently Then We Would Expect

question 3

Multiple Choice

If technology, A, increases permanently then we would expect:

• A)consumption to decrease as the substitution effect would be greater than the income effect of the change.
• B)consumption to increase as the income effect would be greater than the substitution effect of the change.
• C)consumption to increase as the substitution effect would be greater than the income effect of the change.
• D)consumption to decrease as the income effect would be greater than the substitution effect of the change.

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Definitions:

Sales Discounts

A reduction offered by a seller on the list price of a product or service as an incentive for buyers, usually applied to promote sales, clear out inventory, or recognize volume purchases.

General Journal

A primary accounting record used to keep track of all business transactions not recorded in specialized journals, using the double-entry accounting method.

Periodic Inventory System

An inventory system that updates inventory balances at specific intervals instead of continuously, often requiring a physical count.

General Journal

A primary accounting record where financial transactions are chronologically recorded before being posted to specific accounts in the general ledger.