Activities That Increase and Decrease as a Result of Selling

question 23

Multiple Choice

Activities that increase and decrease as a result of selling a company's stock are:

• A)marketing activities.
• B)operating activities.
• C)investing activities.
• D)financing activities.

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Definitions:

Substitution Effect

The adjustment in how consumers spend due to differences in the prices between goods, leading to the substitution of one product for another.

Inferior Good

A type of good whose demand decreases when consumer income rises, unlike normal goods, which have a positive correlation with income.

Normal Good

A type of good for which demand increases as the income of the consumer increases, showing a positive relationship between income and demand.

Demand Function

A mathematical formula that describes the relationship between the quantity of a good or service demanded and its price, along with other factors like income and the prices of related goods.