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NEW QUESTION 20
A cafe located near a university used to only sell one type of coffee for $1.50 a cup. It decided to start selling a new premium cup for $2.50 while still keeping its standard coffee at $1.50. What recent event might have prompted this new product offering?

• A. The university announcing decreased enrollment numbers for next year
• B. An increase in the cafe's rent
• C. The expansion of the university, displacing office buildings in the neighborhood
• D. The opening of a large and expensive apartment complex close to the cafe

Answer: D

NEW QUESTION 21
The graph below reflects which of the following situations in the market for apples?

• A. A new disease kills apple trees.
• B. The government introduces a tax on oranges.
• C. There is a shortage of apples.
• D. New equipment decreases the costs of harvesting apples.

Answer: A

NEW QUESTION 22
A company purchased a piece of equipment for $100,000 on Jan. 1, 2012. The estimated useful life is 10 years with no salvage value at the end of the10-year period. The company used the straight-line method to depreciate this equipment in 2012. However, in 2013, the company decided to change the depreciation method to the double-declining method. What effect did this change in depreciation methods have on the income statement for 2013 and the balance sheet as of Dec. 31, 2013?

• A. The total assets increased, and the net income decreased.
• B. The total assets decreased, and the net income decreased.
• C. The total assets decreased, and the net income increased.
• D. The total assets increased, and the net income increased.

Answer: B

NEW QUESTION 23
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