In an Indifference Curve/budget Line Diagram,generally When the Price of a Good

question 119

Multiple Choice

In an indifference curve/budget line diagram,generally when the price of a good increases,the consumer purchases

• A) less of the good and moves to a lower indifference curve.
• B) less of the good and moves to a higher indifference curve.
• C) more of the good and moves to a higher indifference curve.
• D) more of the good and moves to a lower indifference curve.
• E) the same amount of the good and moves to a higher indifference curve.

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Definitions:

Unit Variable Costs

The cost associated with producing one additional unit of product, including materials, labor, and other variable expenses.

Break-even Point

The financial state in which total costs and total revenues are equal, meaning no net loss or gain is incurred by the business.

Variable Costs

Costs that change directly and proportionally with the level of production or business activity, such as materials and labor.

Contribution Margin

The amount by which sales revenue exceeds variable costs, indicating the contribution towards covering fixed costs and generating profit.