You Are Asked to Determine, Other Things Equal, the Effects

question 274

Multiple Choice

You are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product Xupon (1) the demand (D) for, or supply (S) of, X, (2) the equilibrium price (P) of X and (3) the equilibrium quantity (Q) of X.Refer to the above.An increase in the tastes and preferences for X will:

• A)increase S, decrease P, and increase Q.
• B)decrease S, decrease P, and decrease Q.
• C)increase D, increase P, and increase Q.
• D)decrease D, decrease P, and decrease Q.

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Definitions:

Net Income

The residual income of a company or individual after all expenses, taxes, and deductions have been subtracted from total revenue.

IRS Method

Techniques and guidelines set by the Internal Revenue Service for calculating and filing taxes.

Depreciation

The method of allocating the cost of a tangible or physical asset over its useful life.

Royalties

Payments made to owners of intellectual property, like patents or copyrights, in exchange for usage rights.