All Else Equal, an Increase in the Price of Bicycle

question 61

Multiple Choice

All else equal, an increase in the price of bicycle helmets, would tend to:

• A)reduce the demand for cars
• B)increase the demand for bicycles
• C)reduce the demand for bicycles
• D)cause more riders to walk to work.

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Definitions:

Credit Sales

Sales made on credit, where the payment is received after the service or good is delivered.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered or used but not yet paid for.

Credit Sales

Sales transactions where the payment is deferred to a future date, as opposed to cash sales where payment is made immediately.

Raw Materials

The basic materials and substances used in the initial stages of production before being transformed into final products.