Suppose the Demand for X Is Given by Q_x^d =

question 20

Multiple Choice

Suppose the demand for X is given by Q_x^d = 100 − 2P_X + 4P_Y + 10M + 2A,where P_X represents the price of good X,P_Y is the price of good Y,M is income and A is the amount of advertising on good X.Based on this information,we know that good Y is

• A) a substitute for good X.
• B) a complement for good X.
• C) an inferior good.
• D) a normal good.

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Definitions:

Accruals

The accounting practice of recording revenues and expenses when they are incurred, regardless of when cash transactions happen.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and ability to cover short-term liabilities.

Dividend Yield

The ratio of a company's annual dividends per share to its current share price, indicating how much an investor gets back relative to the share price.

Working Capital Accruals

The portion of earnings not realized in cash, representing changes in working capital that affect a company's cash flow.