If the Graph Shown Represents Tina's Budget Constraint,which of the Following

question 130

Multiple Choice

If the graph shown represents Tina's budget constraint,which of the following consumption bundles can Tina not afford?

• A) Three pairs of earrings and four hairbands
• B) Two pairs of earrings and four hairbands
• C) No earrings and six hairbands
• D) Cannot answer this question without knowing Tina's income and the prices of the two goods

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Definitions:

Markup

Markup refers to the difference between the cost of a good or service and its selling price, expressed as a percentage over the cost.

Cost-Plus Approach

A pricing strategy where a fixed percentage or a fixed amount is added to the cost of producing a product to determine its selling price.

Markup

The amount added to the cost price of goods to cover overhead and profit.

Selling Expenses

Costs incurred directly from the sale of goods or services, including advertising, sales commissions, and the salaries of sales staff.