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Suppose a Graph Is Drawn to Show a Consumer's Preferences

question 92

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Suppose a graph is drawn to show a consumer's preferences for football tickets and basketball tickets.The quantity of football tickets is measured on the horizontal axis.If the price-consumption curve is horizontal when the price of football tickets changes,then


Definitions:

Implicit Cost

Costs that represent the loss of potential gain from using assets in an alternative option rather than in their current use.

Implicit Costs

The opportunity costs of resources that are owned by the firm and used in production, not involving direct payment of money but affecting the firm's profitability.

Explicit Costs

Direct payments made to others in the course of running a business, such as wages, rent, and materials.

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from gross revenue, according to accepted accounting principles.

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