If We Observe That Jamie's Budget Constraint Has Moved Outward

question 408

Multiple Choice

If we observe that Jamie's budget constraint has moved outward, then we know for certain that

• A)her income must have increased.
• B)she will be indifferent between goods X and Y.
• C)the price of one or both of the goods must have decreased.
• D)she can reach a higher indifference curve.

---

Definitions:

Fair Value

The estimated market value of an asset or liability based on current market prices or valuations.

Fiscal Year

A one-year period used for accounting purposes and preparing financial statements, not necessarily aligning with the calendar year.

Equity Method

An accounting technique used to record the investments in other entities where the investor has significant influence but not full control.

Outstanding Stock

The number of shares of a corporation that have been issued and are currently owned by shareholders.