This Graph Shows Three Different Budget Constraints: A,B,andC

question 70

Multiple Choice

This graph shows three different budget constraints: A,B,andC.

If Gary has budget constraint A,and the price of milk is $3 a gallon,what is Gary's income?

• A)$9
• B)$27
• C)$12
• D)Cannot answer this without knowing the price of soda.

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Definitions:

General Rule

A principle or guideline that applies broadly and is considered to be of general use or value.

External Sales

Sales made to parties outside of the company, as opposed to internal transactions.

Variable Cost

Costs that vary directly with the level of production or volume of output.

Excess Capacity

The situation where a company's production facilities can produce more goods than currently demanded by its market.