Other Things Being Equal, the Effects of an Increase in the Price

question 21

Multiple Choice

Other things being equal, the effects of an increase in the price of computers would best be represented by which of the following?

• A) A movement up along the demand curve for computers.
• B) A movement down along the demand curve for computers.
• C) A leftward shift in the demand curve for computers.
• D) A rightward shift in the demand curve for computers.

---

Definitions:

Independent Projects

Projects that are evaluated for investment purposes, where the acceptance of one project does not affect the decision to undertake another.

IRR

A financial metric, the Internal Rate of Return, is applied to estimate the profitability prospects of potential investments.

AAR

Average Annual Return, representing the average amount of money earned by an investment each year over a given time period.

Discounted Payback

A capital budgeting method that calculates the time needed to recoup the initial investment in present value terms, considering the time value of money.