Suppose the Price of Aluminum Rises, and as a Result

question 177

Multiple Choice

Suppose the price of aluminum rises, and as a result, a manufacturing company purchases tin to use in place of the now higher-priced aluminum. This is referred to as

• A) substitution in consumption.
• B) substitution in production.
• C) reverse substitution.
• D) factor reversal.

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Definitions:

Planning

The process of outlining business objectives, strategies, and actions to achieve those objectives.

Treasury Bonds

Long-term government securities issued with the promise of payment upon maturity with a fixed interest rate.

Return

The income generated from an investment or the gain from an asset relative to the investment's or asset's cost.

Risk

The potential for losing something of value or the chance of an action leading to an undesirable outcome.