Employees of a Publishing Company Received an Increase in Salary

question 105

Multiple Choice

Employees of a publishing company received an increase in salary of 7% plus a bonus of $700. Let S(x) = 1.07x + 700 represent the new salary in terms of the previous salary x. Find and interpret S(13,000) .

• A) $13,700; If an employee's old salary was $13,000, then his/her new salary was $13,700 after the increase and bonus.
• B) $11,495; If an employee's old salary was $11,495, then his/her new salary was $13,000 after the increase and bonus.
• C) $14,610; If an employee's old salary was $13,000, then his/her new salary was $14,610 after the increase and bonus.
• D) $22,800; If an employee's old salary was $22,800, then his/her new salary was $13,000 after the increase and bonus.

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Definitions:

Noncash Gift-Giving

The act of giving gifts that are not in the form of money or monetary value, often personal or symbolic.

Marginal Utility

The increased utility or satisfaction derived by a buyer from the consumption of one extra unit of a good or service.

Income Effect

The fluctuation in income for either an individual or the economy and its influence on the demand levels for certain goods or services.

Substitution Effect

The economic principle that as prices rise, consumers will replace more expensive items with less costly alternatives.