On a Graph We Draw a Consumer's Budget Constraint, Measuring

question 303

Multiple Choice

On a graph we draw a consumer's budget constraint, measuring the number of apples on the horizontal axis and the number of light bulbs on the vertical axis. If the slope of the budget constraint is -2, then

• A) an apple costs twice as much as a light bulb.
• B) the opportunity cost of a light bulb is 2 apples.
• C) the opportunity cost of an apple is one-half of a light bulc.
• D) All of the above are correct.

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Definitions:

Accounting Cycle

The collective process of recording and processing the accounting events of a company, culminating in the production of financial statements within a specific period.

Income Summary

An account used in the closing process that summarizes the revenues and expenses for an accounting period before transferring the net income or loss to owner's equity.

Revenue and Expense Accounts

Accounts in the general ledger that track the income generated from sales and the costs incurred during business operations, respectively.

Worksheet

A document or spreadsheet used for planning, adjusting entries, and preparing financial statements before they are finalized in official reports.