Suppose That a New Study Is Released Stating That Consumption

question 207

Multiple Choice

Suppose that a new study is released stating that consumption of orange juice (a substitute for apple juice) reduces the risk of cancer,and a major freeze destroys half of the country's apple crop.What happens to the price and quantity of apple juice?

• A) The price of apple juice might rise or fall and the quantity of apple juice falls.
• B) The price of apple juice might rise or fall and the quantity of apple juice rises.
• C) The price of apple juice falls and the quantity of apple juice falls.
• D) The quantity of apple juice might rise or fall and the price of apple juice rises.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is used globally to prepare public company financial statements.

GAAP

Generally Accepted Accounting Principles; a framework of accounting standards, principles, and procedures.

Lease Capitalization

The process of recording a lease as an asset and a corresponding liability on the balance sheet, reflecting the assets' use and obligation to make lease payments.

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased asset at a price significantly below its fair market value.