Assume the Quantity of Good X Is Measured on the Horizontal

question 10

Multiple Choice

Assume the quantity of good X is measured on the horizontal axis and the quantity of good Y on the vertical axis.Initial prices are P_X = $5 and P_Y = $10.The consumer's income is $100.If P_Y increases to $20,then

• A)the entire budget line shifts parallel toward the origin.
• B)the budget line will rotate toward the origin,slope remaining constant.
• C)the budget line will rotate toward the origin with the slope changing from 1/2 to 1/4 (in absolute values).
• D)the entire budget line shifts parallel away from the origin.
• E)the budget line will rotate away from the origin with the slope changing from 1/4 to 1/2 (in absolute values).

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Definitions:

Adjusting Entry

Accounting entries recorded at the conclusion of a financial period for the purpose of assigning revenues and expenses to the time frame in which they were actually incurred.

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Equity.

Note Receivable

A written promise to pay a specified amount of money, with interest, by a certain date.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenditure to the correct period.