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Figure 3-5 -In Figure 3-5, If the Initial Demand for Margarine Were

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Figure 3-5 Figure 3-5   -In Figure 3-5, if the initial demand for margarine were D<sub>1</sub>, an increase in the price of butter, which is a substitute for margarine, would tend to cause which of the following changes in the market for margarine? A)  a shift in the demand curve from D<sub>1</sub> to D<sub>2</sub> B)  a shift in the demand curve from D<sub>2</sub> to D<sub>1</sub> C)  a movement along demand curve D<sub>1</sub> from a to b D)  a movement along demand curve D<sub>1</sub> from b to a
-In Figure 3-5, if the initial demand for margarine were D1, an increase in the price of butter, which is a substitute for margarine, would tend to cause which of the following changes in the market for margarine?


Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in the context of bond investments, it is the interest rate used by investors to compare different bond issues.

Capital Lease

A lease considered as a purchase of an asset, where the lessee records the leased asset as if it were owned.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset, typically defined in a lease agreement.

Implicit Rate

The interest rate implied by the cash flows of a lease, not explicitly stated within the lease agreement.

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