-Refer to the Above Table

question 12

Multiple Choice

-Refer to the above table. If the price of Good X is $2, the price of Good Y is $1, and the consumer has $9, the rational consumer will purchase

• A) 6 units of Good X and 0 units of Good Y.
• B) 6 units of Good X and 3 units of Good Y.
• C) 2 units of Good X and 5 units of Good Y.
• D) 5 units of Good X and 6 units of Good Y.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from its core business operations.

Fixed Costs

Operating expenses of a business that remain constant regardless of the volume of production or sales.

Unit Contribution Margin

The amount each unit sold contributes towards covering fixed costs and generating profit, calculated as the selling price per unit minus the variable cost per unit.

Operating Income

Earnings before interest and taxes (EBIT), measuring a company's profit from its operational and regular business activities.