Graph 22-4 -Refer to Graph 22-4.A Person Who Chooses to Consume Bundle

question 1

Multiple Choice

Graph 22-4
-Refer to Graph 22-4.A person who chooses to consume bundle C rather than bundle A is likely to:

• A)place a higher relative value on croissants than on coffee
• B)place a higher relative value on coffee than on croissants
• C)gain more satisfaction from bundle C than bundle A
• D)gain more satisfaction from bundle B than bundle A

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Definitions:

Economic Profit

The difference between a firm's total revenues and its opportunity costs, representing the additional gain over what could have been earned in the next best alternative.

Normal Profit

The minimum level of earnings needed for a company to remain in business, often considered as the company's opportunity cost.

Break Even

The juncture where the aggregate of all costs matches the total income, leading to neither a profit nor a loss.

Short Run

A period of time during which at least one of a firm's inputs is fixed.