Equivalent Variation Means

question 3

Multiple Choice

Equivalent variation means

• A) finding an equivalent change in income that puts a person on the same utility as a change in price would.
• B) finding equal tax rates that insure quantity demanded does not change.
• C) equalizing excess burden across all markets.
• D) moving the same distance in either direction from a starting point on an indifference curve.

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Definitions:

ROI Computation

The calculation of Return on Investment, which measures the gain or loss generated on an investment relative to the amount of money invested.

Net Book Value

The value of an asset after accounting for depreciation or amortization found on a company's balance sheet.

Operating Expense

Expenses incurred from a company's operational activities, excluding cost of goods sold, such as selling, general, and administrative expenses.

Minimum Required Rate of Return

The lowest acceptable return on investment for a project or investment, often determined by the cost of capital or desired profit.