Now Suppose Your Income Returns to Its Original Level,$300,the Price

question 70

Multiple Choice

Now suppose your income returns to its original level,$300,the price of sweaters remains constant at $20,but the price of jeans falls from $60 per pair to $30 per pair,so your new budget constraint is $30j + $20s = $300.This rotation of your budget constraint is shown in the graph below.

As a result of the decrease in the price of jeans from $60 per pair to $30 per pair,the opportunity cost of a pair of jeans ________.

• A) remains unchanged at 3 sweaters
• B) falls to 2 sweaters
• C) falls to 1.5 sweaters
• D) falls to sweaters

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Definitions:

Due Diligence

A comprehensive appraisal of a business or individual prior to signing a contract, particularly in terms of evaluating financial performance and obligations.

Potential Acquirer

An entity, typically a company or individual, considered likely or able to purchase or take over another business.

Structure and Definition

The organization and explanation of the components that make up a concept, system, or entity, detailing how they interrelate.

Takeover

The acquisition of one company by another, where the acquiring company assumes control over the target company.