The Restriction That a Consumer's Total Expenditure on Goods and Services

question 221

Multiple Choice

The restriction that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as

• A) maximising behaviour.
• B) economising behaviour.
• C) the price constraint.
• D) the budget constraint.

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Definitions:

Inventory Turnover Rate

A metric that shows how many times a company's inventory is sold and replaced over a certain period of time.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.

Sales

The process where goods or services are traded for money, which constitutes the main revenue stream for the majority of companies.

Operating Cycle

The period it takes for a business to buy inventory, sell it to customers, and collect the cash from these sales.