There Was a More Than Proportional Decrease in Quantity Demanded

question 165

Multiple Choice

There was a more than proportional decrease in quantity demanded for cupcakes when the local baker raised the price by 20 percent.The price elasticity of demand for cupcakes is

• A) inelastic.
• B) elastic.
• C) perfectly inelastic.
• D) perfectly elastic.
• E) unitary elastic.

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Definitions:

Voucher System

A control mechanism in accounting that ensures all purchases and expenditures are properly authorized before payment is made.

Petty Cash Fund

A small amount of cash kept on hand for minor or incidental expenses.

Voucher System

A control mechanism in accounting that involves authorization and documentation before a financial transaction is made.

General Journal Entries

Basic accounting records where all day-to-day financial transactions of a business are initially recorded, before being transferred to specific accounts in the general ledger.