Which of the Following Statements Is FALSE Regarding Consumer Choice

question 410

Multiple Choice

Which of the following statements is FALSE regarding consumer choice?

• A) Each change in price has a substitution effect and a real income effect.
• B) When price falls, the consumer chooses in favor of the cheaper good.
• C) Diminishing marginal utility is one reason for a downward sloping demand curve.
• D) Purchasing power has an inverse relationship with the rise in income.

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Definitions:

Bond Redemption

Bond redemption is the process of repaying the principal amount of a bond at or before its maturity date by the issuer.

Carrying Value

Also known as book value, it is the value of an asset as shown on the balance sheet, calculated as the original cost minus accumulated depreciation.

Premium on Bonds Payable

The additional amount over the face value for which bonds are sold, reflecting the market's perception of lower risk or higher interest compared to the market rate.

Bonds Payable

Long-term liabilities representing money borrowed by a company that must be repaid, typically with interest, at a future date.