The Following Diagram Shows Two Budget Lines: a and B

question 560

Multiple Choice

The following diagram shows two budget lines: A and B. Which of the following could explain the change in the budget line from A to B?

• A)a decrease in the price of X
• B)an increase in the price of Y
• C)a decrease in the price of Y
• D)More than one of the above could explain this change.

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Definitions:

Output Q₁

A specific quantity of goods or services produced, denoted as Q₁ to signify a particular level or point of production output.

Output Q₃

Refers to the third quartile of output in a dataset, representing the dividing point between the highest 25% and the lower 75% of data.

Constant Returns to Scale

Constant Returns to Scale occur when an increase in all inputs leads to a proportional increase in output, indicating linear growth.

Output Q₁

Refers to the quantity of goods or services produced at the first level of output in a production process.