The Income of a Consumer Is $40, the Price of a Is

question 26

Multiple Choice

The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the quantity of A is measured vertically, then the slope of the budget line is

• A)−0.5.
• B)−1.0.
• C)−2.0.
• D)−2.5.

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Definitions:

TR/q

Represents Total Revenue divided by quantity, a formula used to calculate average revenue per unit sold.

Short Run

A period during which at least one of a firm's inputs is fixed and cannot be changed.

Average Total Cost

The total cost of production divided by the quantity of output produced, it includes all variable and fixed costs.

Fixed Capital

Long-term assets used in production, such as buildings, machinery, and equipment, which are not easily converted into cash.