Suppose That a Consumer Has a Choice Between Hotdogs and Video

question 161

Multiple Choice

Suppose that a consumer has a choice between hotdogs and video games. All of the following can lead to a rotation of the consumer's budget line except a(n)

• A)increase in the price of hotdogs.
• B)decrease in the price of hotdogs.
• C)increase in the price of video games.
• D)decrease in the price of video games.
• E)increase in the consumer's income.

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Definitions:

Profit

The financial gain obtained when the revenues generated from business activities exceed the expenses, costs, and taxes involved in sustaining the activities.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which includes labor, materials, and other variable expenses.

Profit

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.