The Following Figure Shows a Consumer's Budget Constraint for Jeans

question 59

Multiple Choice

The following figure shows a consumer's budget constraint for jeans and sweaters.

-Refer to the figure above.Suppose B₁ is the original budget constraint of a consumer.A change in the budget constraint from B₁ to B₂ indicates ________.

• A) an increase in the price of sweaters
• B) a decrease in the price of sweaters
• C) an increase in the consumer's income
• D) a decrease in the consumer's income.

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Definitions:

Average Variable Cost

The variable cost per unit of output, calculated by dividing total variable costs by the quantity of output.

Cost Of Production

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overhead costs.

Labor Hours

The number of hours worked by employees for the production of goods or services.

Machine Hours

A measure of production or work performed, calculated as the number of hours a machine is operated.