A Change in the Quantity Demanded of Peanuts, a Factor

question 55

Multiple Choice

A change in the quantity demanded of peanuts, a factor of production used to produce chocolate-covered peanuts, will occur if:

• A) the price of peanuts decreases.
• B) the price of chocolate-covered peanuts increases.
• C) the demand for chocolate-covered peanuts decreases.
• D) a new, improved chocolate-covered-peanut-making machine is purchased by candy companies.

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Definitions:

Investing Activity

This refers to transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

Statement of Cash Flows

A financial report detailing the impact of alterations in balance sheet figures and income on cash and cash equivalents, dividing the cash flows into categories of operating, investing, and financing activities.

Operating Activities

Transactions and events associated with the primary operations of a business, such as sales and service provision, reflected in its cash flow.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate the cash from operating activities.