The Budget Constraint Shows That

question 280

Multiple Choice

The budget constraint shows that

• A) the consumer faces a trade-off in the consumption of goods.
• B) the consumer can have as many goods as he wants.
• C) as consumers spend more on one good, they spend more on others.
• D) total income equals total spending on one good.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding cost of goods sold (COGS).

Tax Liability

The total amount of tax that an individual or corporation is legally obligated to pay to an authority as the result of the occurrence of a taxable event.

Dividends Paid

Cash or other forms of payouts made by a company to its shareholders from its earnings.

Net Cash Flow

The difference between a company's cash inflows and outflows in a given period.