If All Prices and Income Change by the Same Proportion

question 7

Multiple Choice

If all prices and income change by the same proportion:

• A) the budget line shifts out.
• B) the budget line shifts in.
• C) the budget line rotates outward.
• D) the budget line doesn't change.

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Definitions:

Market Penetration

An indicator of the total sales or use of a product or service relative to the maximum potential market for that product or service.

Market Development

Strategies or activities aimed at finding new markets or expanding existing ones for a product or service.

Diversification

A strategy for managing risk that diversifies a portfolio by incorporating a broad range of investments to reduce the effect of any single asset's performance.

Market Penetration

A measure of the extent to which a product or service is recognized and bought by customers within a particular market.