When Universities Announce a Large Tuition Increase and Follow It

question 130

Multiple Choice

When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

• A) have elastic demand and students who use financial aid have inelastic demand.
• B) have inelastic demand and students who use financial aid have elastic demand.
• C) view a college education as an inferior good and students who use financial aid view it as a normal good.
• D) view a college education as a normal good and students who use financial aid view it as an inferior good.

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Definitions:

Balance Sheet

A financial statement that provides a snapshot of a company's financial position, including assets, liabilities, and shareholders' equity at a specific point in time.

Gross Profit Method

An inventory estimation technique that uses the historical gross profit margin to estimate the cost of goods sold and ending inventory.

Physically Counting

The manual process of counting inventory items one by one to verify the quantity on hand.

Current Assets

Assets that are expected to be converted into cash within one year or one business cycle.