In Year 1 the Average Price of X Is $10,and

question 141

Multiple Choice

In year 1 the average price of X is $10,and in year 2 the average price of X is $23.If consumers buy more units of X in year 2 than in year 1,it follows that

• A) the law of supply does not hold for good X.
• B) demand for good X could be higher in year 2 than in year 1.
• C) supply of good X could be less in year 2 than in year 1.
• D) good X buyers have received an increase in income between year 1 and year 2,and good X is a normal good.
• E) b and d

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Definitions:

Days' Sales

The metric used to evaluate how efficiently a company can convert its inventory into sales, often expressed as days' sales in inventory.

Receivables

All money claims against other entities, including people, business firms, and other organizations.

Current Liabilities

Short-term financial obligations a company owes and is expected to pay within a year, such as accounts payable and short-term loans.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.