Consider Budget Constraints a and B in the Graph Shown

question 57

Multiple Choice

Consider budget constraints A and B in the graph shown.The slope of A compared to the slope of B:

• A)is steeper,showing that movie tickets are relatively more expensive in line A.
• B)is flatter,showing that books are relatively less expensive in line A.
• C)shows that the opportunity cost of books is smaller in line A.
• D)shows that the opportunity cost of books is greater in line A.

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Definitions:

Carrying Value

The book value of assets and liabilities on a company's balance sheet, excluding market value fluctuations.

Common Stock

Equity securities representing ownership in a corporation, with voting rights and potential dividends.

Par

The face value of a bond or stock, which is the amount the issuer agrees to pay at maturity in the case of a bond, or the value assigned to a share of stock at the time of issue.

Consolidated Statements

Financial statements that aggregate the financial information of a parent company and its subsidiaries into one document.