Use the Following to Answer Questions

question 302

Multiple Choice

Use the following to answer questions:
Figure: Supply and Demand 5
-(Figure: Supply and Demand 5) Refer to the figure. In the figure, representing a market for apartments, a rent-controlled price of $800 will cause:

• A) a short-run shortage of 6,000 apartments.
• B) a short-run shortage of 8,000 apartments.
• C) a short-run shortage of 3,000 apartments.
• D) a short-run surplus of 14,000 apartments.

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Definitions:

Acid-test Ratio

A financial metric that measures a company's ability to pay its current liabilities with its most liquid assets, excluding inventory.

Asset Turnover

A measure of how efficiently a company uses its assets to generate sales; computed by dividing net sales by average total assets.

Price-earnings Ratio

A valuation metric for stocks, calculated by dividing the market price per share by the earnings per share.

Dividends

Payments made by a corporation to its shareholder members, usually derived from the company's profits.