The Effect of a Change in Income on Buying Plans

question 65

Multiple Choice

The effect of a change in income on buying plans is called the

• A)income effect.
• B)substitution effect.
• C)normal effect.
• D)inferior effect.
• E)price effect.

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Definitions:

Directly Attributable Costs

Costs that can be directly linked to a specific asset, activity, or project, and thereby included in its cost base.

Assumes Liabilities

The process by which one party takes on the legal responsibility for the debts or obligations of another party.

Fair Values

The market value of selling an asset or the outlay for a liability transfer in a negotiated agreement among trading participants at the time of estimation.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of the identifiable net assets of the acquired business.