The Saying "The Lower the Price, the Better" May Not

question 117

Multiple Choice

The saying "the lower the price, the better" may not always be correct for an economy's public interest because

• A)people should have to pay for what they want.
• B)people will overuse something they perceive as being cheaper than the utility they receive for it.
• C)the government can no longer afford to provide all the goods and services it provides because it is slowly going broke.
• D)cheaper prices will make people buy less of other things.

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Definitions:

Cash Increase

The rise in the amount of cash and cash equivalents that a company has during a particular period, often resulting from operational activities, financing, or investments.

Statement of Cash Flows

A document that outlines the overall cash income from both the operational efforts and investment income of a company, and the expenditure on business activities and investment payments over a specified period.

Operating Activities

Activities related to the day-to-day functions of a business involved in producing and selling its products or services.

Indirect Method

A method used for the cash flow statement that starts with net income and adjusts for changes in account balances that affect available cash.