You Have Been Asked by Your Economics Professor to Graph

question 143

Multiple Choice

You have been asked by your economics professor to graph the market for lumber and then to analyze the change that would occur in equilibrium price as a result of recent forest fires in the west.Your first step would be to

• A)decide which direction to shift the curve.
• B)decide whether the fires affected demand or supply.
• C)graph the shift to see the effect on equilibrium.
• D)None of the above is correct.

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Definitions:

Warehouse Cost

Expenses associated with storing, handling, and managing goods in a warehouse.

Working Capital

It is the difference between a company's current assets and current liabilities, indicating the liquidity available to fund operations.

Distributorship

A business arrangement in which one company grants another company or individual the right to sell its goods or products within a specified territory or market.

Annual Net Cash

The total amount of cash that a business generates and uses over a one-year period, after all expenditures are accounted for.