Assume That a Consumer Has a Given Budget or Income

question 187

Multiple Choice

Assume that a consumer has a given budget or income of $12, and that she can buy only two goods, apples or bananas. The price of an apple is $1.50 and the price of a banana is $0.75. Refer to the information given above. If the consumer decides to buy 4 apples, how many bananas can she also buy with the remainder of her budget?

• A) 8 bananas
• B) 4 bananas
• C) 6 bananas
• D) 10 bananas

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Definitions:

Depreciation

The reduction in value of an asset over time, due in particular to wear and tear.

Labor Cost

Labor cost refers to the total expenditure incurred by an employer to compensate its employees, including wages, benefits, and taxes.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specific period, indicating its overall liquidity.

Working Capital

The difference between a company's current assets and its current liabilities, representing the short-term financial health and operational efficiency of the business.