Keen Beans, a Leading Coffee Roaster, Anticipated That the Prices

question 49

Multiple Choice

Keen Beans, a leading coffee roaster, anticipated that the prices of coffee beans from Costa Rica, where its main suppliers were located, would double in less than three years. This would significantly affect Keen Beans' profit margins. Thus, Keen Beans decided to develop a new partnership with a supplier in Indonesia. As predicted, the price of Costa Rican coffee beans increased twofold. Because the price of Indonesian coffee beans was much lower, Keen Beans was able to maintain its profit margins in turbulent times. Which of the following isolating mechanisms does this scenario best illustrate?

• A) intellectual property protection
• B) causal ambiguity
• C) time compression diseconomies
• D) better expectations of future resource value

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Definitions:

Ledger

A comprehensive collection of a company's financial transactions, organized by account.

Alphabetical Order

A method of sorting by arranging items according to the sequence of letters in the alphabet.

Credits

In accounting, credits are entries that decrease assets or increase liabilities and equity on a company's balance sheet, corresponding to the double-entry bookkeeping system.

Debits

Entries made on the left-hand side of an account record in double-entry bookkeeping, indicating increases in assets or expense accounts, or decreases in liabilities, equity, or revenue accounts.