The Number of Times a Firm Sells Its Merchandise Inventory

question 52

Multiple Choice

The number of times a firm sells its merchandise inventory in one year is known as its _____.

• A) cost of goods sold
• B) gross profit on operations
• C) inventory turnover
• D) accounts receivable turnover
• E) net purchases

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Definitions:

Substitution Effect

Changes in what consumers purchase, brought about by alterations in the relative costs of goods, persuading consumers to opt for alternatives over their usual choices.

Income Effect

The correlation between income changes in an economy or for individuals and their effect on the quantity of goods and services demanded.

Opportunity Cost

The value of the next best alternative that is foregone when a decision is made to choose one option over another.

Leisure Time

Free time in which an individual is not working, is not engaged in compulsory activities, and can choose activities for relaxation, enjoyment, or other personal development.