Exhibit 20-8 ​ Refer to Exhibit 20-8. a Move of the Budget Constraint

question 100

Multiple Choice

Exhibit 20-8 ​

Refer to Exhibit 20-8. A move of the budget constraint from 1 to 2 is caused by a

• A)rise in the price of good X.
• B)fall in the price of good X.
• C)rise in the price of good Y.
• D)fall in income.

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Definitions:

Salvage Value

The projected final worth of an asset at the end of its period of use.

Operating Costs

The expenses related to the day-to-day activities of a business, such as wages and rent.

After-Tax Discount Rate

The discount rate used in financial analysis that reflects the net cost or benefit of investment after accounting for taxes.

Incremental Sales

The additional revenue generated from a specific business action or decision, such as launching a new product.