If the Price of a Pizza Increases and the Demand

question 298

Multiple Choice

If the price of a pizza increases and the demand curve for pizza does NOT shift, then the consumer surplus from pizza will

• A) increase.
• B) decrease.
• C) equal the producer surplus if the market produces the efficient quantity of pizza.
• D) remain the same.

Calculate the current value of stocks based on varying dividend growth rates and required rates of return.

Analyze the impact of changes in dividend growth rates on stock valuation.

Evaluate stock prices using the discounted cash flow method for different scenarios including constant growth, high growth followed by lower growth, and decline in dividends.

Understand the concept of required rate of return and its effect on stock valuation.

---

Definitions:

Median Voter

A theory which suggests that the outcome of a majority vote is most likely to represent the preferences of the voter who is in the middle of the political spectrum.

Road Repair

The process of fixing and maintaining roads to ensure they are safe and efficient for transportation.

Condorcet Paradox

A scenario in social choice theory where collective preferences can be cyclical, even if the preferences of individual voters are not, leading to the absence of a clear majority opinion.

Transitive Preferences

In decision theory, a preference system where if an individual prefers option A to B and B to C, then they also prefer A to C.