Beginning at the Horizontal Axis Intercept,as a Consumer Moves Upward

question 18

Multiple Choice

Beginning at the horizontal axis intercept,as a consumer moves upward along the budget line,he will find that

• A)the marginal utility per dollar spent on the vertical axis good increases
• B)the marginal utility per dollar spent on the horizontal axis good increases
• C)the marginal utility per dollar spent on the horizontal axis good decreases
• D)the marginal utilities per dollar spent on both goods increase
• E)the marginal utilities per dollar spent on both goods remain constant along that particular budget line

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Definitions:

Net Operating Income

The profit derived from a company's everyday operations, calculated by subtracting operating expenses from gross profit.

Planning Budget

A budget prepared for a specific level of activity; it can be adjusted to reflect various levels of operation.

Labor Rate Variance

A financial measure that compares the actual cost of labor to the expected or standard cost, indicating how well a company manages its labor expenses.

Labor Efficiency Variance

A measure of the difference between the actual hours worked by employees and the expected hours worked, multiplied by the standard labor rate.