If the Price Elasticity of Demand for a Good Is

question 199

Multiple Choice

If the price elasticity of demand for a good is 2.0,then a 10 percent increase in price results in a

• A)0.2 percent decrease in the quantity demanded.
• B)5 percent decrease in the quantity demanded.
• C)20 percent decrease in the quantity demanded.
• D)40 percent decrease in the quantity demanded.

Recognize the importance of economic substance over legal form in revenue recognition.

Understand the percentage-of-completion method for recognizing profits on long-term contracts.

Identify the implications of revising project cost estimates on profit recognition.

Calculate project profitability using the percentage-of-completion and cost-to-cost methods.

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Definitions:

Promissory Note

A financial document in which one entity guarantees to pay a certain amount of money to another, either when asked or at an agreed-upon date in the future.

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Canadian Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by Statistics Canada.

Annual Rate of Inflation

The percentage increase in the cost of goods and services over a one-year period.