If Sam Has $80

question 173

Multiple Choice

If Sam has $80.00 each week to spend on tacos and magazines, and their respective prices are $.50 per taco and $4.00 per magazine, which of the following equations represents his budget line?

• A) $80.00 = $.50/Q_t + $4.00/Q_m
• B) $80.00 = Q_t/Q_m + $.50 /$4.00
• C) $80.00 = $.50(Q_m) + $4.00(Q_t)
• D) $80.00 = $.50(Q_t) + $4.00(Q_m)

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Definitions:

Long-Run Cost

The expenses a firm incurs over a period where all inputs are variable, thus considering the scalability and technology change effects on production costs.

Constant-Cost Industry

An industry in which the cost of production does not change significantly with either an increase or decrease in output levels.

Constant-cost Industry

An industry in which the input prices do not change as the industry's output changes.

Competitive Market

A market structure where multiple firms offer similar or identical products or services, and no single firm can significantly influence market prices.