Exhibit 11-2 -In Exhibit 11-2, If P₃ Is the Prevailing Price Level

question 20

Multiple Choice

Exhibit 11-2
-In Exhibit 11-2, if P₃ is the prevailing price level, then

• A)the expected price level is less than the actual price level
• B)there is a contractionary gap
• C)the price level will rise
• D)the actual unemployment rate is above the natural rate
• E)potential output is greater than actual output

Distinguish between different types of warranties and their coverages.

Recognize the phases of the consumer buying process.

Evaluate personal opportunity costs in consumer purchases.

Know the legal resources available to consumers including small claims court and class-action suits.

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Definitions:

Raw Materials Cost

The total expense associated with the raw materials used in the production of goods or services.

Administrative Expense

Costs related to the general administration of a business, such as salaries of executive officers and costs of general services.

Estimated

An approximate calculation or judgment of a value, number, or quantity, based on limited information.

Selling and Administrative Expense

Overheads related to the selling of products and the management of an organization.