Suppose a Consumer Can Choose to Consume Either Apples or Oranges.Which

question 11

Multiple Choice

Suppose a consumer can choose to consume either apples or oranges.Which of the following results when the price of each fruit increases by 15 percent?

• A)The consumer substitutes apples for oranges.
• B)The income effect of this price change is positive.
• C)The substitution effect of this price change is zero.
• D)The consumer demands more of both the goods.
• E)The consumer substitutes oranges for apples.

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Definitions:

Settlement

The process of finalizing a transaction where the buyer pays the seller, and the seller transfers ownership of an asset, or the resolution of a dispute.

Maturity Value

The amount that will be paid to the holder of a financial instrument at the instrument's maturity date, including principal and any accrued interest.

Due Date

The date by which a payment, task, or obligation must be completed or fulfilled.

Journalize

The process of recording transactions in a journal or diary, which includes specifying the accounts affected and the amounts, usually as a first step in the accounting cycle.