If Bert's Budget Constraint Is Represented in the Graph Shown

question 34

Multiple Choice

If Bert's budget constraint is represented in the graph shown, his opportunity cost of three bags of chips is:

• A)twelve pints of ice cream.
• B)eight pints of ice cream.
• C)four pints of ice cream.
• D)Cannot answer without knowing Bert's income.

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Definitions:

Purchases Returns

Goods returned by a buyer to the seller, often due to defects or dissatisfaction, resulting in a refund or credit.

Purchase Discounts

Discounts a buyer receives for paying suppliers early, which are used to reduce the cost of purchased goods.

Net Purchases

Net purchases are the total amount of purchases minus returns, allowances, and discounts over a specified period, often used in analyzing inventory costs.

Sales Discounts

Reductions in the price of goods or services offered as an incentive to customers to encourage prompt payment.