The Effect of a Stock Dividend Is to

question 141

Multiple Choice

The effect of a stock dividend is to

• A) change the composition of shareholders' equity.
• B) decrease total assets and shareholders' equity.
• C) decrease total assets and total liabilities.
• D) increase the book value per share of common shares.

Recognize how the availability of substitutes affects the elasticity of demand.

Understand the concept of cross elasticity of demand and its implications for goods being substitutes or complements.

Identify the determinants of the elasticity of demand.

Calculating and understanding income elasticity of demand.

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Definitions:

Marginal Costs

The cost associated with producing one additional unit of a product or service.

Variable Costs

Expenses that change in proportion to the activity or volume of operations in a business.

Fixed Costs

Fixed charges that are unaffected by changes in production volume, including rental fees and payrolls.

Variable Cost Curve

The variable cost curve shows the relationship between total variable cost and the level of a firm's output, demonstrating how costs fluctuate with changes in production.