The Less Important the Good Is in Everyday Consumption and the Less

question 42

Multiple Choice

The less important the good is in everyday consumption and the less the percentage of a budget that is spent on the good:

• A) the greater will be the price elasticity of the good.
• B) the greater will be the effect of the price increase on the decrease in the demand.
• C) the smaller will be the price elasticity of the good.
• D) the smaller will be the effect of the price increase on the increase in the demand.

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Definitions:

AASB 3

An accounting standard detailing the requirements for the accounting of business combinations.

IFRS 3

Business Combinations, an International Financial Reporting Standard that outlines the accounting and reporting requirements for mergers and acquisitions.

Goodwill

The intangible asset that arises when a company acquires another business for more than the fair value of its separable net assets.

Fair Value

The expected selling price for an asset or the amount needed to cover a liability, facilitated through a systematic deal between market participants on the specific date of measurement.