When the Budget Constraint Is Tangent to the Indifference Curve,what

question 123

Multiple Choice

When the budget constraint is tangent to the indifference curve,what is likely to be the case

• A)The consumer cannot be made better off without increasing her income.
• B)The consumer is likely to be at a suboptimal level of consumption.
• C)Income is at its optimum for a consumer.
• D)Indifference curves are likely to intersect.

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Definitions:

Sales Revenues

The income received by a company from its sales of goods or the provision of services.

Absorption Costing

This refers to an accounting strategy that comprehensively adds the costs of direct materials, direct labor, and both varying and fixed overheads into the total cost of manufacturing a product.

Variable Costing

A pricing approach that incorporates solely the variable production expenses—such as direct materials, direct labor, and variable manufacturing overhead—into the unit cost of a product.

Fixed Overhead

Expenses that remain constant regardless of the production or sales volume, including items like lease payments, wages, and insurance premiums.