You and a Friend Are Visiting a New City and Would

question 40

Multiple Choice

You and a friend are visiting a new city and would like to splurge and go out for a fine meal. You look at the restaurant listings in the newspaper and find one that is very expensive. Your friend says: "Let's go for it. With prices like that, we're bound to have a delicious meal!" In making this statement, your friend was most likely guided by the ____.

• A)vacation effect
• B)representativeness heuristic
• C)contrast effect
• D)primacy effect

Understand the concept of market equilibrium and how it is determined by the intersection of supply and demand.

Identify conditions of excess supply and excess demand in a market and predict the market's response.

Analyze the effects of price changes on market equilibrium.

Understand the impact of external factors (like an increase in the price of raw materials) on supply and demand.

---

Definitions:

Cost of Goods Sold

The explicit expenses linked to manufacturing the products a business sells, including costs for materials and labor.

Balance Sheet

A document detailing a business's assets, liabilities, and equity of shareholders at a particular moment, offering an overview of its financial health.

Spreadsheet

A digital document where data is arranged in rows and columns, commonly used for calculations and data analysis.

Job-Order Costing

An accounting method where costs are assigned to specific jobs or batches, allowing for a detailed tracking of production costs.