If the Supply of a Normal Good Remains Unchanged but the Income

question 3

Multiple Choice

If the supply of a normal good remains unchanged but the income level of the consumer increases:

• A) the quantity demanded of the good falls.
• B) the supply curve for the good shifts to the left.
• C) the price of the good reduces.
• D) the equilibrium quantity of the good increases.

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Definitions:

Stockholders' Equity

Represents the residual interest in the assets of a corporation after deducting liabilities.

Treasury Stock

Shares that were once outstanding in the stock market but were bought back by the issuing company.

Paid-In Capital

Paid-in capital refers to the funds a company has garnered from its shareholders through the sale of stock shares.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, held in the company's treasury and not considered when calculating earnings per share or dividends.