When Opportunities Are Not Present in the Regular Local Economy

question 39

Multiple Choice

When opportunities are not present in the regular local economy, people in poor inner-city neighborhoods turn to an __________ for survival.

• A) environmental economy
• B) informal economy
• C) occupied regional government
• D) option based economy

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Definitions:

Variable Costs

Costs that are directly correlated with the volume of production or sales.

Fixed Costs

Expenses that do not vary with the level of production or sales volumes, such as rent, salaries, and insurance premiums.

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Pretax Income

Income earned by a company before taxes are deducted, indicating the profitability of a company's core operations.