For a person whose income is based on a commission (earning a percentage of the value of their sales), then
A) the household budget line must have a very steep slope.
B) the household budget line is more uncertain from month to month than if income were a fixed monthly amount.
C) it is best to think optimistically and assume that a high level of income will exist.
D) the lower the salary, the flatter the slope of the budget line will be.

Question

Quizplus · Accepted Answer

The household budget line for a person earning income based on commission is more uncertain from month to month because their income depends on the value of their sales, which can vary significantly. This variability introduces uncertainty compared to a fixed monthly income.

For a Person Whose Income Is Based on a Commission