Suppose a Consumer Has an Income of $800 Per Month

question 90

Multiple Choice

Suppose a consumer has an income of $800 per month and that she spends her entire income each month on beer and bratwurst. The price of a pint of beer is $5, and the price of a bratwurst is $4. Which of the following combinations of beers and bratwursts represents a point that would lie to the interior of the consumer's budget constraint?

• A)160 beers and 200 bratwursts
• B)40 beers and 50 bratwursts
• C)80 beers and 100 bratwursts
• D)160 beers and 0 bratwursts

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Definitions:

Income Statements

Financial statements that show a company's revenue, expenses, and profits over a specific period of time, typically a quarter or a year.

Common-Size Financial Statements

Financial statements that present all line items as percentages of a common base figure, facilitating comparison across periods or companies.

Actual Transactions

The completed deals or exchanges of goods, services, or financial instruments between parties.

Financial Ratios

Quantitative measures derived from financial statements used to assess a company's performance, financial health, and profitability.