Suppose the Price of Soda Is $2 Each and the Price

question 9

Multiple Choice

Suppose the price of soda is $2 each and the price of a pizza slice is $4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to $3 each, David will

• A) decrease the number of sodas bought and the demand curve for sodas will shift leftward.
• B) decrease the number of sodas bought and move along the demand curve for soda.
• C) buy more pizza and move along the demand curve for pizza.
• D) buy less pizza and the demand curve for pizza will shift leftward.

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Definitions:

Business Combination

A transaction or event through which a company acquires control over one or more businesses.

Intragroup Dividends

Dividends paid between entities within the same group, often eliminated in the consolidation process of preparing consolidated financial statements.

Tax Effect

The impact of taxes on a company's financial results, specifically how taxes influence reported earnings and cash flows.

Consolidation

Consolidation refers to the process of combining the financial statements of separate business entities, typically parent and subsidiary companies, into a single financial statement.