If the Price of the Good Measured Along the Vertical

question 50

Multiple Choice

If the price of the good measured along the vertical axis increases without a change in the price of the good measured along the horizontal axis,a consumer's budget constraint ________.

• A) pivots rightward without a change in the intercept on the horizontal axis
• B) pivots leftward without a change in the intercept on the horizontal axis
• C) shifts to the right
• D) shifts to the left

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Definitions:

Useful Life

The estimated duration of time an asset is expected to be usable for its intended purpose.

Residual Value

The estimated value that an asset will have at the end of its useful life, after it has been depreciated.

Present Value

The current value of future monetary amounts or sequences of cash inflows, factoring in a specific rate of interest.

Annuity

A monetary tool that issues a predetermined sequence of payments to someone, commonly used to generate an income for those who have retired.