If Consumers Can Easily Switch to a Close Substitute When

question 49

Multiple Choice

If consumers can easily switch to a close substitute when the price of a good increases, demand for that good is likely to be:

• A)elastic.
• B)inelastic.
• C)unit elastic.
• D)perfectly inelastic.

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Definitions:

Carrying Amount

The book value of an asset or liability on the balance sheet, calculated by deducting any accumulated depreciation or amortization from the asset's initial cost.

Bonds Payable

Liabilities representing amounts owed by a company to bondholders, to be paid at a specified maturity date.

Face Value

The nominal value or dollar value printed on a bond, note, or other financial instrument, representing the amount due at maturity.

Unamortized Discount

An unamortized discount refers to the portion of a bond's initial discount that has not yet been amortized or gradually written off over the life of the bond.