The X-intercept of the budget constraint represents
a. how much of good Y can be purchased if no good X is purchased and all income is spent.
b. how much of good X can be purchased if no good Y is purchased and all income is spent.
c. total income divided by the price of X.
d. b and c.
Question 2
Transfer prices
a. are an accounting devise to allocate the costs and revenues of intermediate products across divisions
b. increase the 'profits' of the profit center producing the intermediate product when they rise
c. decrease the 'profits' of the profit center using the intermediate product when they rise
d. all of the above
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