Suppose a Consumer Spends His Income on CDs and DVDs

question 445

Multiple Choice

Suppose a consumer spends his income on CDs and DVDs. If his income decreases, the budget constraint for CDs and DVDs will

• A)shift outward, parallel to the original budget constraint.
• B)shift inward, parallel to the original budget constraint.
• C)rotate outward along the CD axis because he can afford more CDs.
• D)rotate outward along the DVD axis because he can afford more DVDs.

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Definitions:

Materials Overhead

Costs related to the production process that are not directly tied to the product being manufactured, such as factory supplies and equipment maintenance.

Raw Materials

Basic materials used in the production process to create goods and products.

Finished Product

A completed item ready for sale, having undergone all stages of manufacturing and preparation.

Organizing

The process of arranging or structuring resources and tasks to achieve objectives efficiently, often relating to business or project management.