If the Price of Apples Falls and the Price of Oranges

question 172

Multiple Choice

If the price of apples falls and the price of oranges remains constant:

• A) apples are now relatively cheaper.
• B) the fall in the price of apples made consumers richer.
• C) the fall in the price of apples, ceteris paribus, makes the marginal utility of apples divided by their price exceed the marginal utility of oranges divided by their price.
• D) all of the above statements are true.

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Definitions:

Financial Statements

Reports summarizing a company's financial performance and position, including income statement, balance sheet, and cash flow statement.

Depreciation

The process of allocating the cost of a tangible asset over its service life, reflecting the decrease in value over time.

Land's Cost

The purchase price of land plus any additional costs spent to put it into use, such as legal fees and land grading expenses.

Prepaid Insurance

An asset account that reflects the amount paid for insurance policies in advance, before the coverage period.