The Price of a Large Pepperoni Pizza Used to Be

question 100

Multiple Choice

The price of a large pepperoni pizza used to be $14, but this week the price rose to $18. With a budget of just $30, you can't afford as many pizzas at the higher price. This change in consumer behavior reflects the

• A) real income effect.
• B) substitution effect.
• C) nominal income effect.
• D) concept of diminishing marginal utility.

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Definitions:

Intangible Assets

Assets that lack physical substance but possess economic value, such as intellectual property, goodwill, and trademarks.

Financial Accounting

The field of accounting that focuses on recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time.

Goodwill

An intangible asset that represents the excess value of a purchased company over the fair value of its identifiable net assets.

Amortize

The gradual reduction of a debt over a period of time through regular payments of principal and interest sufficient to pay off the debt by maturity.