Under Which of the Following Conditions Would the Interdiction of Illegal

question 42

Multiple Choice

Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?

• A)The interdiction has the effect of shifting the demand curve for illegal drugs to the right.
• B)The price elasticity of demand for illegal drugs is 1.3.
• C)The price elasticity of supply for illegal drugs is 0.8.
• D)As a result of the interdiction,the price of illegal drugs increases by 20 percent and the quantity of illegal drugs sold decreases by 16 percent.

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Definitions:

Held-to-Maturity Investments

Debt securities that a company intends and is able to hold until maturity, recorded on the balance sheet at acquisition cost adjusted for amortization.

Held-for-Collection Investments

Investments acquired with the intention of holding them to collect their contractual cash flows, rather than for selling in the near term.

Equity Method

An accounting technique used for recording investments in associate companies where the investor has significant influence over the investee.

Carrying Value

The book value of an asset on a company's balance sheet, derived from its original cost minus accumulated depreciation or amortization.