Consider the Indifference Curve Map and Budget Constraint for Two

question 19

Multiple Choice

Consider the indifference curve map and budget constraint for two goods (B and K) .Suppose the good on the horizontal axis (K) is normal.When the price of the normal good on the horizontal axis (K) increases

• A)the substitution effect and income effect both cause an increase in the consumption of K.
• B)the substitution effect causes a decrease in the consumption of K and the income effect causes an increase in the consumption of K.However, the substitution effect is greater than the income effect.
• C)the substitution effect causes an increase in the consumption of K and the income effect causes a decrease in the consumption of K.However, the substitution effect is greater than the income effect.
• D)the substitution effect and income effect both cause a decrease in the consumption of K.

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Definitions:

Activity-Based Costing

A method of cost accounting that assigns costs to products or services based on the resources they consume.

Manufacturing Overhead

The indirect costs associated with manufacturing, such as utilities, maintenance, and salaries not directly involved in production.

Time-Driven

Refers to activities or processes whose scheduling or execution is strictly influenced by the passage of time.

Total Minutes

The complete count of minutes accumulated across a specified timeframe, often used in time tracking or productivity analysis.