Number of CDsper monthAB C D0Number of cassette tapes per monthMark's budget constraint is AB. It would pivot to AC if the price ofSelect one:O a. CDs decreased.O b. cassette tapes increased.cassette tapes decreased.UOd. CDs increased. As more of a good, such as television sets, is produced, the opportunity costs of producing it increases. Thismost likely occurs becauseO a. consumers would be willing to pay higher prices for the good as more of the good is produced.O b.as more of a good is produced the quality of that good declines and therefore the costs of productionincrease.O. C.as more of a good is produced the inputs used to produce that good will increase in price.O d.resources are not equally well suited to producing all goods and as more of a good is produced it isnecessary to use résources less well suited to the production of that good.

Answered: Mark's budget constraint is AB. It…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Number of CDs
per month
A
B C D
0
Number of cassette tapes per month
Mark's budget constraint is AB. It would pivot to AC if the price of
Select one:
O a. CDs decreased.
O b. cassette tapes increased.
cassette tapes decreased.
U
Od. CDs increased.

As more of a good, such as television sets, is produced, the opportunity costs of producing it increases. This
most likely occurs because
O a. consumers would be willing to pay higher prices for the good as more of the good is produced.
O b.
as more of a good is produced the quality of that good declines and therefore the costs of production
increase.
O. C.
as more of a good is produced the inputs used to produce that good will increase in price.
O d.
resources are not equally well suited to producing all goods and as more of a good is produced it is
necessary to use résources less well suited to the production of that good.

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In consumer theory, the combination of goods and services that a consumer can acquire for his or her limited budget is called a budget constaint. Due to their restricted income, consumers must adhere to a budget that limits the amount of items they may buy. A rational customer seeks out combinations of products and services that will provide them with the most happiness and usefulness. Budget restrictions and the indifference curve can be used together to get this result.

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