Charlie’s utility function is ????(x????,x????) = x????x????. The price of apples used to be $1, the price of bananas used to be
$2, and his income used to be $40. If the price of apples increased to $5 and the price of bananas stayed constant, the substitution effect on Charlie’s apple consumption would reduce his consumption by (choose the closest answer) (a) 4 apples (b) 13 apples
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Answer:
D. Earnings before interest and taxes(EBIT)
Explanation:
Earnings before interest and taxes abbreviated EBIT in the income statement is arrived at by deducting operating expenses from revenue/sales to get operating income. The operating income is earnings before interest and taxes which comes before gross income(subtract other expenses). Operating expenses are the main expenses concerned with operations of the business such as the Sales
