Assuming That Bus Travel Is an Inferior Good, an Increase

question 8

Multiple Choice

Assuming that bus travel is an inferior good, an increase in consumer income, other things being equal, will cause

• A) an upward movement along the demand curve for bus travel.
• B) a downward movement along the demand curve for bus travel.
• C) a rightward shift in the demand curve for bus travel.
• D) a leftward shift in the demand curve for bus travel.

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Definitions:

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.

Net Income

The final income of a business once expenses and taxes are removed from the total revenue.

Invested Capital

Total capital invested in a company by its shareholders and debt holders, used for calculating returns generated by a company.

Assets

Assets represent resources owned or controlled by a business or individual that are expected to produce economic value or benefit in the future.