In General, a "Big Ticket Item" Such as a House

question 128

Multiple Choice

In general, a "big ticket item" such as a house or new car will

• A)tend to have a more elastic demand than a lower-priced good.
• B)tend to have an inelastic demand because spending on the item takes up a large share of the average consumer's budget.
• C)tend to have an inelastic demand because it has many substitutes.
• D)tend to have a more inelastic demand the more time that passes.

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Definitions:

Unfavorable Direct Materials Price Variance

A financial metric indicating that the actual cost of direct materials was higher than the planned or standard cost, leading to a decrease in profitability.

Standard Price

Standard price is a pre-determined cost assigned to materials, labor, and overheads to measure variances in budgeting and accounting.

Direct Materials

Raw materials directly used in the production of goods, easily traceable to the final product.

Theoretical Standard

A benchmark for the most efficient level of operating performance or cost control, assuming perfect conditions.