Recall the Application About the Response to Lower Taxes in French

question 68

Multiple Choice

Recall the application about the response to lower taxes in French restaurants.If the demand for restaurant meals is elastic,we could predict the tax cut will:

• A)decrease the sales of restaurant meals.
• B)increase the sales of restaurant meals.
• C)benefit only sellers.
• D)none of the above

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Definitions:

Fixed Asset Turnover Ratio

A financial metric that measures how efficiently a company uses its fixed assets to generate sales, calculated by dividing net sales by average fixed assets.

Capital Intensity Ratio

This ratio measures a company's investment in physical assets relative to its labor costs, indicating how much capital is used in the production process.

External Financing Needed

The amount of funding that a company must seek from external sources to finance its planned activities or investments, beyond what it can generate internally.

Capital Intensity Ratio

A measure of how much capital is used in relation to labor in the production process of a company.