Answer the Question on the Basis of the Following Data

question 166

Multiple Choice

Answer the question on the basis of the following data. The data indicate that

• A) consumers spend 80 percent of their after-tax incomes.
• B) consumers spend 90 percent of their after-tax incomes.
• C) a tax reduction will reduce consumption.
• D) the relationship between consumption and after-tax income is random.

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Definitions:

Benefit

An advantage or profit gained from something.

Foregone Benefit

The lost potential gain from other alternatives when one alternative is chosen.

Alternative Cost

Also known as opportunity cost, it represents the benefit that is missed or given up when choosing one alternative over another.

Comparative Cost

Analyzing and comparing the costs of different business strategies or production methodologies to identify the most effective option.