AICPA Exam CPA-Business Topic 2 Question 88 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 88
Topic #: 2

The Waymand family typically ate hamburger as a regular staple in their diet. In the last few years, the family income has doubled, and they have now replaced hamburger with steak as a regular staple in their diet. This is an example where the demand for hamburger:

AIs relatively elastic.

BIs perfectly elastic.

CResponds as an inferior good.

DIs perfectly inelastic.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. The most logical sequence in planning and controlling capital expenditures is to begin with identifying capital addition projects and other capital needs.

Choice 'a' is incorrect. Analyzing capital addition proposals omits other capital needs.

Choice 'b' is incorrect. Analyzing and evaluating all promising alternatives is beyond the scope of planning and controlling capital expenditures.

Choice 'd' is incorrect. Developing capital budgets is the same as planning and controlling capital expenditures.

by Laticia at May 22, 2024, 11:27 AM

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Mollie

4 days ago

I bet the Waymands are now all about that 'beef bourguignon' life. Gotta keep up with the Jones's, am I right?

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Leota

4 days ago

C is the correct answer, no doubt about it. Hamburger is clearly an inferior good in this scenario. Who would've thought the Waymands were such fancy steak eaters?

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1 months ago

I think the demand for hamburger is relatively elastic.

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