The Vertical and Horizontal Axes Intercepts of the Budget Line

question 118

Multiple Choice

The vertical and horizontal axes intercepts of the budget line represent the:

• A) quantity of goods that will be purchase if only that good is purchased.
• B) preference of one good compared to another good.
• C) quantity of each good that is outside the consumer's income.
• D) only two choices that will spend the entire budget.

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Definitions:

Break-even Point

The break-even point is the level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Variable Costs

Expenses that fluctuate with the level of output or sales, such as raw materials and direct labor, making them distinct from fixed costs.

Break-even Point

The point at which total revenues equal total expenses, resulting in no profit or loss for the business.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which typically includes materials and labor.