The Following Question Are Based on the Following Diagram Illustrating

question 22

Multiple Choice

The following question are based on the following diagram illustrating the results of a study of food expenditures and income for a group of families:

-The evidence presented in the graph indicates that

• A) all families at a given income level spend the same amount on food.
• B) the amount of household income depends on the amount of household food expenditures.
• C) an inverse relationship exists between the two variables.
• D) for the families included in the study, no relationship exists between food expenditures and income.
• E) if income falls an average of $15,000, annual food expenditures will fall an average of $2,500.

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Definitions:

Entrepreneurial Talent

The unique set of abilities, creativity and initiative needed to identify market opportunities and create new businesses.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning revenue from these resources elsewhere.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources that it already owns, without directly paying for them.

Leasing

A contractual arrangement where one party (the lessor) grants another party (the lessee) the right to use an asset for a specified period in return for regular payments.