A Consumer's Demand for CDs Can Be Represented by a Line

question 117

Multiple Choice

A consumer's demand for CDs can be represented by a line with slope -b and intercept a. If the current price of CDs is $P, then the ratio of consumer surplus to total expenditures on CDs equals

• A) (a - P)(a - bP).
• B) 1/2(a - P)(a - bP).
• C) D(a - bP).
• D) (a - P)/P.
• E) (a/b - P)/(2P).

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Definitions:

Operating Activities

Activities directly related to the principal revenue-generating activities of an organization.

Accumulated Depreciation

The total amount of a tangible asset's cost that has been allocated as depreciation expense since the asset was acquired and put into use.

Cash Dividends

Cash distributions from a company's earnings to its shareholders.

Balance Sheet

An account that outlines the financial position of a company, detailing its assets, liabilities, and owners' equity at a given point in time.