Ted and Karen Have a Combined Take-Home Income of $4,500

question 32

Essay

Ted and Karen have a combined take-home income of $4,500.Their total monthly payments on consumer debt are $875.What is their debt safety ratio? Are they exhibiting any sign of approaching credit problems?

---

Definitions:

Average Costs

Average costs refer to the total cost of production divided by the number of units produced, indicating the cost of producing each unit.

Marginal Costs

The cost added by producing one additional unit of a product or service.

Diseconomies of Scale

The phenomenon where production costs per unit increase as the scale of operation expands.

Inputs

Resources used in the production process, including labor, capital, materials, and energy, to create output or goods and services.