Assume That There Are Two Goods,x and Y

question 207

Multiple Choice

Assume that there are two goods,x and y.The quantity of good x is measured on the x-axis and the quantity of good y is measured on the y-axis.If the price of good y rises,then the

• A) y-axis intercept of the budget line increases.
• B) y-axis intercept of the budget line increases and the x-axis intercept of the budget line decreases.
• C) y-axis intercept of the budget line decreases and the x-axis intercept does not change.
• D) slope of the budget line changes.
• E) Both answers C and D are correct.

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Definitions:

Loss

The negative financial result from a business's operations when costs exceed revenues.

Issuing Bonds

The process by which a company or government raises capital by selling bonds to investors, incurring debt that must be repaid over time with interest.

Stockholders

Individuals or institutions that own at least one share of a company's stock, essentially owning a portion of the company.

Tax Deductible

Refers to expenses that can be subtracted from gross income to determine taxable income, thereby reducing the overall tax liability.