Which of the Following Describes What Happens to a Consumer's

question 232

Multiple Choice

Which of the following describes what happens to a consumer's budget line if that consumer's budget increases?

• A) The budget line becomes steeper.
• B) The budget line becomes more horizontal.
• C) The budget line shifts farther away from the origin of the graph.
• D) The budget line shifts closer to the origin of the graph.
• E) The budget line does not change.

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Definitions:

Machine-Hours

A measure of production time, representing the total hours worked by machines in the manufacturing process, often used to allocate manufacturing overhead to products.

Markup

The extra sum included in the buying price of items to account for operational expenses and profit, which establishes the sales price.

Job-Order Costing

A cost accounting system that assigns costs to specific jobs or batches, used in industries where products are distinctly different.

Predetermined Overhead Rate

An estimated overhead rate used to apply manufacturing overhead to products, calculated before the accounting period begins.