If, Due to Rising Demand, the Price of Cotton Rose

question 125

Multiple Choice

If, due to rising demand, the price of cotton rose 15 percent while the prices of other goods and services rose an average of 10 percent,

• A)​the relative price of cotton has risen and one would expect the output of cotton to rise as a result.
• B)​the relative price of cotton has risen and one would expect the output of cotton to fall as a result.
• C)​the relative price of cotton has fallen and one would expect the output of cotton to rise as a result.
• D)​the relative price of cotton has fallen and one would expect the output of cotton to fall as a result.

---

Definitions:

Accounts Receivable

Liabilities of customers to a firm for provisions or merchandise that have been delivered but payment is outstanding.

Capital Balance

The amount recorded in a shareholder's or partner's equity account, reflecting their investment in the business.

Full Time

Employment status characterized by working a minimum number of hours defined by the employer, typically involving benefits not offered to part-time employees.

Net Income

The net income is the final amount of profit a company makes after deducting all costs, taxes, and expenses from its total revenue.