If Canadian Consumers Bought More Gasoline in 2007 (When Prices

question 180

Multiple Choice

If Canadian consumers bought more gasoline in 2007 (when prices averaged $1.30 per litre) than they did in 1980 (when prices averaged $0.40 per litre) , does that mean that people buy more gasoline at higher prices?

• A) Yes, because gasoline is a luxury good that consumers willingly purchase-even at higher prices.
• B) Yes, because gas is a necessity that is in short supply. Consumers are always willing to buy more gasoline-even at higher prices.
• C) No, because there is too little information provided about inflation, consumer income and other variables to make an appropriate comparison.
• D) No, because prices cannot be compared over time.

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Definitions:

Adjusting Entry

A journal entry made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Unadjusted Trial Balance

A listing of all the accounts in the general ledger with their balances before any adjusting entries are made.

Adjusted Trial Balance

A trial balance prepared after adjusting entries have been made and posted to the ledger, used to verify the equality of debits and credits.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.