Figure 21-16 -Refer to Figure 21-16. the Price of X Is $20

question 94

Multiple Choice

Figure 21-16
-Refer to Figure 21-16. The price of X is $20, the price of Y is $5, and the consumer's income is $40. Which point represents the consumer's optimal choice?

• A)A
• B)B
• C)C

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Definitions:

Fixed Cost

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance expenses.

Variable

An element, feature, or factor that is liable to vary or change; used in statistical analysis and experiments.

Output

The total amount of goods and services produced by an economy or a production process.

AFC

Average Fixed Cost (AFC) is the fixed costs of production (such as rent, salaries, machinery) divided by the quantity of output produced.