A Consumer Who Doesn't Spend All of Her Income

question 332

Multiple Choice

A consumer who doesn't spend all of her income

• A)would be at a point outside of her budget constraint.
• B)would be at a point inside her budget constraint.
• C)must not be consuming positive quantities of all goods.
• D)must be consuming at a point where her budget constraint touches one of the axes.

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Definitions:

General Journal

A bookkeeping ledger that records each financial transaction of a company in chronological order.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue; often referred to as the bottom line.

Revenue and Expense Account Balances

The amounts recorded in accounts tracking the income earned and expenses incurred by a business over a period of time.