The Constraint for Resource 1 Is 5 X₁ + 4 $\ge$

question 27

Multiple Choice

The constraint for resource 1 is 5 X₁ + 4 X₂ $\ge$ 200. If X₁ = 40 and X₂ = 20, how many additional units, if any, of resource 1 are employed above the minimum of 200?

• A)0
• B)20
• C)40
• D)80

Deduce the slope of the budget constraint and interpret its economic implications.

Evaluate available and unavailable choices within a given budget constraint.

Explain the opportunity cost concept in the context of budget constraints.

Assess how shifts in budget constraints reflect economic decisions.

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Definitions:

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that exceeds variable costs, contributing to covering fixed costs and generating profit.

Profit-volume Ratio

A measure that indicates the relationship between the profit generated by a business and its sales volume, usually expressed as a percentage.

Property Tax Rates

The percentage at which local governments tax the value of real estate properties.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales volume, such as rent or insurance.