The Diagram Below Shows a Set of Budget Lines Facing

question 40

Multiple Choice

The diagram below shows a set of budget lines facing a household. FIGURE 6-8
-Refer to Figure 6-8.The movement of the budget line from ab to ac could be caused by

• A)an increase in money income.
• B)an increase in the price of food.
• C)an increase in the price of housing.
• D)a decrease in the price of food.
• E)a decrease in the price of housing.

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Definitions:

Common Stock

Equity security that represents ownership in a corporation, entitling the owner to vote at shareholders' meetings and to receive dividends.

Cash Collected

The amount of money received by a company during a specific period from all sources, including sales, investments, financing, etc.

Net Sales

The total revenue from sales of products or services less returns, allowances, and discounts.

Accounts Receivable

The money owed to a company by its customers for goods or services that have been delivered but not yet paid for.