Two Goods Are Considered Substitutes If

question 129

Multiple Choice

Two goods are considered substitutes if

• A) a decrease in the demand for one leads to a decrease in the supply of the other.
• B) an increase in the demand for one leads to a decrease in the supply of the other.
• C) an increase in the price of one leads to an increase in the demand for the other.
• D) a decrease in the price of one leads to an increase in the demand for the other.
• E) a decrease in the supply of one leads producers to switch to production of the other.

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Definitions:

Generally Accepted Accounting Principles

Generally Accepted Accounting Principles (GAAP) refer to a common set of accounting rules, standards, and procedures used in preparing financial statements in the United States.

Financial Accounting Standards Board

An independent nonprofit organization responsible for establishing accounting and financial reporting standards for companies and organizations in the United States.

Federal Law

Legislation enacted by a country's federal government that is valid across the entire nation.

Enron Corporation

An American energy, commodities, and services company based in Houston, Texas, that became infamous for its bankruptcy in 2001 due to one of the largest corporate fraud scandals in history.