Suppose That It Takes 2 Square Feet to Grow a Cockleshell

question 30

Multiple Choice

suppose that it takes 2 square feet to grow a cockleshell and 5 square feet to grow a silver bell in Mary's garden.If her space had initially been 90 square feet and were increased to 120 square feet,

• A)she would only increase her planting of silver bells.
• B)she would plant more silver bells and more cockleshells.
• C)she would only increase her planting of cockleshells.
• D)cockleshells would be an inferior good.
• E)she would increase her planting of cockleshells and decrease her planting of silver bells.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of a specific product.

Flexible Budget

An adjustable budget framework responsive to shifts in volume or levels of activity.

Activity Level

A measure of the volume of production or operations, often used as a basis for allocating costs or setting prices.

Direct Materials

Raw materials that are directly traceable and integral to the finished product.