Carlos Has at One Time or Another Lived in Argentina

question 17

Multiple Choice

Carlos has at one time or another lived in Argentina, Bolivia, and Colombia.He buys only two goods, x and y.In Argentina the prices were ($9, $3) and he consumed the bundle (6, 7) .In Bolivia he consumed (9, 2) .In Colombia he consumed the bundle (6, 5) at the prices ($3, $3) .

• A)The Argentine bundle is directly revealed preferred to the Bolivian bundle.
• B)The Argentine bundle is indirectly revealed preferred to the Bolivian bundle.
• C)The Colombian bundle is directly revealed preferred to the Argentine bundle.
• D)The Bolivian bundle is indirectly revealed preferred to the Argentine bundle.
• E)None of the above.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or business activity, including expenses such as raw materials and labor.

Machine Hours

The total operating time of machinery used in the production process during a specific period.

High-low Method

A technique used in cost accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Fixed Cost

Expenses that do not change regardless of the production volume, including rent, salaries, and insurance premiums.