During the Last Decade, the Price of a Computer Fell

question 328

Multiple Choice

During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the

• A) "law of demand" was definitely contradicted.
• B) "law of supply" was definitely contradicted.
• C) demand curve shifted rightward.
• D) supply curve shifted rightward.

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Definitions:

Equipment Cost

The total expenditure incurred to purchase, install, and make operational a piece of equipment.

CICA

Canadian Institute of Chartered Accountants, responsible for setting accounting and auditing standards in Canada.

Financial Lease

A type of lease in which the lessee is effectively considered to own the asset during the lease term and bears the risk of obsolescence.

Tax Avoidance

The legal practice of structuring financial affairs to minimize tax liabilities without violating the law.