The Linear Equation Y = a + BX Is Often

question 66

Multiple Choice

The linear equation Y = a + bX is often used to express cost formulas.Which of the following representations in this equation is correct?

• A) The b term represents variable cost per unit of activity.
• B) The a term represents variable cost in total.
• C) The X term represents total costs.
• D) The Y term represents total fixed costs.

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Definitions:

Utility Function

A representation in economics that captures a consumer's preference by assigning a utility value to different bundles of goods.

Pareto Optimal

A condition in resource allocation where it's unachievable to improve the standing of any party without detrimentally impacting another party or criterion of choice.

Endowment

The total resources available to an individual or entity, including assets, income, and wealth.

Competitive Equilibrium

Competitive equilibrium is a market condition where supply equals demand, with no incentive for price or quantity adjustments.