Raw Materials

question 66

Multiple Choice

Raw materials

• A) are treated as expense items.
• B) are unprocessed but eventually become part of a final physical good.
• C) include both farm products and natural products.
• D) All of the above are true.
• E) B and C are true.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, holding the consumer's level of utility constant.

Price

The fiscal amount needed for the acquisition of a product or service.

Delphiniums

A genus of flowering plants known for their tall spikes of colorful flowers, commonly found in gardens.

Perfect Substitutes

Goods or services that can be used in exactly the same way and to the same extent, where one can completely replace the other in consumption.