The Budget Line

question 54

Multiple Choice

The budget line

• A)shows the limits to a household's consumption choices.
• B)shows the households total utility.
• C)is downward sloping because it illustrates decreasing marginal utility.
• D)shows how a household's consumption choices change as income changes.
• E)Both A and D are correct.

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Definitions:

Control Perspective

An approach focusing on the monitoring and adjusting of processes and strategies to achieve desired outcomes or objectives.

Revenue Variance

The difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A favorable (unfavorable) revenue variance occurs because the revenue is higher (lower) than expected, given the actual level of activity for the period.

Cost Variance

The difference between the expected cost of a project or production process and the actual cost incurred.

Labour Efficiency Variance

A measure used in cost accounting to evaluate the difference between the actual hours worked and the standard hours expected to produce a certain level of output.