The Contribution Margin Ratio Always Increases When Which of the Following

question 69

Multiple Choice

The contribution margin ratio always increases when which of the following occurs?

• A) Variable expenses as a percentage of sales increase.
• B) Variable expenses as a percentage of sales decrease.
• C) Break-even point increases.
• D) Break-even point decreases.

Understand the concept and calculation of the marginal propensity to save (MPS) and its economic implications.

Grasp the effects of changes in autonomous investment on the economy's equilibrium and the concept of the spending multiplier.

Comprehend how current production levels relative to planned expenditure affect inventories and production decisions.

Understand how autonomous investments affect aggregate expenditure and its impact on the economy.

---

Definitions:

Adolescent Egocentrism

A characteristic of adolescent thinking that leads young people (ages 10 to 13) to focus on themselves to the exclusion of others.

Dual Processing

The notion that two networks exist within the human brain, one for emotional processing of stimuli and one for analytical reasoning.

Imaginary Audience

The other people who, in an adolescent’s egocentric belief, are watching and taking note of his or her appearance, ideas, and behavior. This belief makes many teenagers very self-conscious.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, associated with complex cognitive behavior, personality expression, decision making, and moderating social behavior.