Scenario: Chong's Analysis of International Markets

question 61

Multiple Choice

Scenario: Chong's Analysis of International Markets
John Chong is an inexperienced entrepreneur in global business. He wants to sell his product, Zulu doll, a toy for kids below the age of eight, in every corner of the world. He wants to examine all potential markets but wants to keep his costs low. John has asked you to explain a few things about analyzing international markets.
-The income-elasticity coefficient for Zulu doll is 1.2,which means the demand for Zulu doll will ________.

• A) increase 1.2 percent for every 1.0 percent increase in income
• B) decrease 1.0 percent for every 1.2 percent increase in income
• C) decrease 1.2 percent for every 1.0 percent increase in income
• D) remain stagnant since 1.2 is the equilibrium value

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Definitions:

Journal Entry

A record in accounting that represents a transaction and its impact on various accounts, used to track financial activities.

Cash Short and Over

An account that records the discrepancies between the actual amount of cash received and the expected amount as per records.

Money Market Accounts

Financial accounts that typically offer higher interest rates than savings accounts, while providing the account holder with limited check-writing ability.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories.