If Supply Decreases and Its Slope Remains the Same, Consumer

question 151

Multiple Choice

If supply decreases and its slope remains the same, consumer surplus:

• A) increases.
• B) decreases.
• C) stays the same.
• D) cannot be determined given the information provided.

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenses to the periods in which they actually occurred.

Rent Expense

The cost incurred by a business to utilize property or equipment for operational purposes, recognized as an expense on the income statement.

Accrual Adjusting Entry

An accounting entry made to record revenues that have been earned or expenses that have been incurred but not yet recorded through the normal transaction process.

Interest Expense

The financial charge for the use of borrowed capital, reflected in the income statement.