Exhibit 3-4 -When Both Supply and Demand Shift Right at the Same

question 41

Multiple Choice

Exhibit 3-4
-When both supply and demand shift right at the same time,

• A)the change in equilibrium price cannot be predicted, but the change in equilibrium quantity can be predicted.
• B)the change in both equilibrium price and equilibrium quantity can be predicted.
• C)the change in equilibrium price can be predicted, but the change in equilibrium quantity cannot be predicted.
• D)neither the change in equilibrium price nor equilibrium quantity can be predicted.
• E)either the equilibrium price or equilibrium quantity will change, but not both.

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Definitions:

Total Equity

The residual interest in the assets of a business after deducting liabilities, representing the shareholders' ownership interest.

Retained Earnings

Retained Earnings are the portion of a business's profits not distributed to shareholders as dividends, but kept in the company to reinvest in the business or pay off debt.

Liquidating Dividend

A type of dividend paid by a company to its shareholders out of its capital base, indicating a return of some of the original investment rather than profit.

Capital Contributed

The total value of cash and other assets that shareholders or owners have given to a company in exchange for an ownership interest.