Assume Sally Is Initially in Equilibrium and That X and Y

question 267

Multiple Choice

Assume Sally is initially in equilibrium and that X and Y are normal goods for her. Then the price of X rises. For Sally to move to a new equilibrium point, her consumption of

• A) X must remain constant, but her consumption of Y must increase.
• B) X must decrease.
• C) X must increase.
• D) both X and Y must increase.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset over its useful life.

Venture Capital

A form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential.

Line-by-Line Method

An accounting method for consolidating the financial statements of a parent company and its subsidiaries by adding together similar items line by line.