If the Consumer's Income and All Prices Simultaneously Decrease by One-Half,then

question 261

Multiple Choice

If the consumer's income and all prices simultaneously decrease by one-half,then the optimum consumption will

• A) shift outward relative to the old optimum.
• B) move leftward along the old budget constraint.
• C) shift inward relative to the old optimum.
• D) not change.

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Definitions:

Legal Expenses

Costs incurred by an entity related to the legal services provided for the business, such as attorney fees, litigation expenses, and other legal consultancy fees.

Depletion

Depletion is an accounting method used to allocate the cost of extracting natural resources such as minerals, oil, and gas from the earth over the period they are consumed.

Straight-Line Method

A method of calculating depreciation of an asset, which spreads the cost evenly across its useful life.

Units-of-Activity Method

A depreciation method that allocates costs based on the actual usage or output of the asset rather than time.