Related to the Economics in Practice on Page 82: If

question 48

Multiple Choice

Related to the Economics in Practice on page 82: If a hurricane results in the supply of hotel rooms decreasing and the equilibrium price for hotel rooms increases, the demand for hotel rooms ________ and total revenue from the sale of hotel rooms ________.

• A) has decreased; will decrease
• B) has decreased; may increase, decrease, or stay the same
• C) may have increased, decreased, or stayed the same; will decrease
• D) may have increased, decreased, or stayed the same; may increase, decrease, or stay the same

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Definitions:

Working Capital

The difference between a company’s current assets and current liabilities, indicating the amount of liquid assets available to fund the company’s day-to-day operations.

Discount Factor

A multiplier used to discount future cash flows to their present value.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, resulting in a consistent expense charge.

Discount Factor

A discount factor is a financial metric used to calculate the present value of future cash flows by taking into account the time value of money.