Figure 21-3 -Refer to Figure 21-3.Assume That a Consumer Faces Both Budget

question 73

Multiple Choice

Figure 21-3

-Refer to Figure 21-3.Assume that a consumer faces both budget constraints in graph (a) and graph (b) on two different occasions.If her income has remained constant,what has happened to prices?

• A)The price of X in graph (a) is higher than the price of X in graph (b).
• B)The price of Y in graph (a) is higher than the price of Y in graph (b).
• C)The prices of both X and Y are lower in graph (a).
• D)None of the above are true.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee, without having full control or joint control, typically associated with ownership of 20% to 50% of voting stock.

Shareholders' Equity

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

Pre-acquisition Profits

The earnings generated by an acquired company prior to the date on which it was acquired by the parent company.