Megan Was an Assistant Manager in a Firm When She

question 85

Multiple Choice

Megan was an assistant manager in a firm when she had bought a Hyundai Accent L hatchback.After she was promoted to the position of a senior manager with a big pay raise, she bought a Volvo S80.This is an example of the:

• A)substitution effect.
• B)pricing effect.
• C)supply effect.
• D)demand effect.
• E)income effect.

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Definitions:

Cash Break-even Point

The point at which a business generates enough cash flow to cover its operating expenses, without generating a profit or loss.

Variable Cost

Expenditures that fluctuate according to the degree of production or the volume of goods produced.

Fixed Cost

Costs that remain constant regardless of any change in a firm's activity level, such as lease payments or insurance premiums.

Depreciation

The systematic allocation of the depreciable amount of an asset over its useful life.