Consider Two Goods: Peanuts and Crackers

question 418

Multiple Choice

Consider two goods: peanuts and crackers. The slope of the consumer's budget constraint is measured by the

• A)consumer's income divided by the price of crackers.
• B)relative price of peanuts and crackers.
• C)consumer's marginal rate of substitution.
• D)number of peanuts purchased divided by the number of crackers purchased.

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Definitions:

Vacation Pay

This refers to the compensation employees are entitled to receive for days they are on vacation and not working.

Accrual

Accrual accounting records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur.

Loss Contingencies

Possible financial losses that companies may face as a result of future events that have uncertain outcomes, necessitating disclosure in financial statements if they are both probable and estimable.

Gain Contingencies

Gain contingencies are potential increases in economic benefits to an organization that arise from events whose outcomes or realizations are uncertain until they occur.