The Consumption of Bottled Water Increased Dramatically During the 1990s

question 115

Multiple Choice

The consumption of bottled water increased dramatically during the 1990s.If consumers' utility schedules for water remained constant over this time period,in order for consumers to stay in equilibrium,the price of bottled water must have

• A) risen because marginal utility increased since people consumed more bottled water.
• B) fallen.
• C) remained constant because the marginal utility schedule did not change.
• D) risen because the supply of water must have increased.
• E) We don't have enough information to say what happened to the price.

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Definitions:

Budget

An accounting device used to plan and control resources of operational departments and divisions.

Static Budget

A fixed budget that does not change or adjust to variations in business activity levels throughout the budget period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, useful for managerial control and performance evaluation as it reflects real-time operations rather than fixed forecasts.

Master Budget

An all-encompassing financial planning document that consolidates all of an organization's budgets for sales, production, overhead, and cash flow.