If Resources a and B Are Complementary and Employed in Fixed

question 29

Multiple Choice

If resources A and B are complementary and employed in fixed proportions,

• A)a change in the price of A will have no effect on the quantity of B employed.
• B)an increase in the price of A may either increase or decrease the demand for B.
• C)an increase in the price of A will increase the demand for B.
• D)an increase in the price of A will decrease the demand for B.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.

Stock Dividend

A dividend payment made in shares rather than cash, increasing the total number of shares owned by shareholders.

Retained Earnings Statement

A financial statement that shows the amount of earnings a company has kept (retained) over a period, which have not been distributed as dividends to shareholders.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.