Suppose There Is an Increase in the Cost of Resources

question 37

Multiple Choice

Suppose there is an increase in the cost of resources used in the production of good A. Then

• A)if the price of A rises, we know the demand for A is elastic.
• B)if the total revenue from sales of A rises, we know the demand for A is elastic.
• C)if the total revenue from sales of A falls, we know the demand for A is elastic.
• D)total revenue will increase because the price of A must rise.
• E)total revenue must fall because the quantity bought and sold of A must fall.

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Definitions:

FOB Destination

A shipping term indicating that the seller is responsible for goods and shipping costs until the goods reach the buyer's specified location.

Merchandise

Goods bought for the purpose of resale at a profit.

Accounting Equation

The fundamental equation that represents the relationship among assets, liabilities, and equity of a company; Assets = Liabilities + Equity.

Income from Operations

Profit generated from a company’s regular business activities, excluding non-operating income and expenses.