Suppose a Graph Is Drawn to Show a Consumer's Preferences

question 92

Multiple Choice

Suppose a graph is drawn to show a consumer's preferences for football tickets and basketball tickets.The quantity of football tickets is measured on the horizontal axis.If the price-consumption curve is horizontal when the price of football tickets changes,then

• A) football tickets are an inferior good.
• B) the demand for football tickets is perfectly elastic.
• C) the demand for football tickets is unit elastic.
• D) the demand curve for football tickets will be horizontal.

Realize the importance of specialization and how it affects productivity.

Understand the role of incentives and property rights in economic systems.

Recognize the implications of opportunity costs beyond monetary terms.

Identify the principles behind economic structures, resource ownership, and coordination of economic activities.

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Definitions:

Variable Costing

An accounting technique that involves only variable costs like direct materials, direct labor, and variable manufacturing overhead in the costing of products.

Absorption Costing

A method of accounting that incorporates all costs related to manufacturing—including direct materials, direct labor, and all manufacturing overheads, whether fixed or variable—into the product's cost.

Carrying Value

The book value of an asset on a balance sheet, representing its acquisition cost minus depreciation or amortization.

Ending Inventory

The value or quantity of stock and materials a company has at the end of a financial period.