An Increase in Consumption and a Decrease in Labor Supply

question 153

Multiple Choice

An increase in consumption and a decrease in labor supply would result from

• A) an increase in tax rates.
• B) a decrease in transfer payments.
• C) an increase in transfer payments.
• D) a decrease in government spending.

---

Definitions:

Contribution Margin

Revenues less variable costs.

Discretionary Expenses

Non-essential spending or expenses that can be reduced or eliminated without impacting the fundamental living standard.

Net Income

The total profit remaining after all expenses, taxes, and deductions have been subtracted from total revenue.

Transfer Pricing

The pricing of goods, services, or intangible properties transferred within divisions of a company or between subsidiaries.