George Gnat Subscribes to a Monthly Pest Control Service for His

question 95

Multiple Choice

George Gnat subscribes to a monthly pest control service for his home.Last week,the owner of the service informed George that he will have to raise his monthly service fee because of increases in the price of gasoline used by his workers on their service trips.How is the market for pest control services affected by this?

• A)There is an increase in the supply of pest control services.
• B)There is a decrease in the demand for pest control services.
• C)There is a decrease in the quantity of pest control services supplied.
• D)There is a decrease in the supply of pest control services.

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Definitions:

Capital Lease

A lease agreement that is classified as a purchase by the lessee for accounting purposes, because it transfers substantially all the risks and rewards of ownership.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Lease Payments

Periodic payments made by a lessee to a lessor for the use of an asset over a specified lease term.