Author Question: A consumer has 20 that he wants to spend on two goods: pens priced at 2 each, and pencils priced at ... (Read 142 times)

urbanoutfitters · **on:** Jun 29, 2018

A consumer has 20 that he wants to spend on two goods: pens priced at 2 each, and pencils priced at 1 each. Which of the following correctly represents his budget constraint?

A) 20 = (2/Quantity of pens) + (1/Quantity of pencils)
B) 20 = (2 Quantity of pens) + (1 Quantity of pencils)
C) 20 = (3/Quantity of pens + Quantity of pencils)
D) 20 = 3 (Quantity of pens - Quantity of pencils)

Question 2

Accountants define profit as total revenue minus total cost,

A) and so do economists.
B) but economists define profit as net revenue minus total cost.
C) but economists define profit as net cost minus total revenue.
D) but economists define profit as total cost minus total revenue.
E) but economists have long abandoned the concept of profit.