An Increase in Income

question 59

Multiple Choice

An increase in income

• A)causes a change in consumer preferences.
• B)causes total utility to increase.
• C)does not shift a consumer's demand.
• D)is assumed to have no effect on consumer expenditures.
• E)has no effect on a consumer's budget constraint.

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Definitions:

Incremental Costs

Costs that change as a result of a new decision or alternative action, also known as marginal costs.

Incremental Costs

Incremental costs are the additional costs incurred when a business increases its level of operations or production.

Make or Buy

A decision-making process used by companies to determine whether to produce goods in-house or purchase them from an external supplier.

Incremental Costs

Costs that change depending on the level of production or an alternative course of action.