Question

expenses rent $450 utilities $150 food $220 clothes $200 cell phone $75 net income $155 a. this budget can be modified by increasing the amount spent on food and utilities and decreasing the amount spent on clothes and rent, thereby maintaining a positive actual net income. b. this budget can be modified by reducing the amount spent on rent and utilities, thereby reducing overall expenses to have the maximum amount of money for all other expenses. c. this budget can be modified by reducing the amount spent on food and clothes, thereby reducing overall expenses to have the maximum amount of money for fixed expenses and maintaining a positive actual net income. d. this budget cannot be modified.

Explanation:

Step1: Analyze option a

Increasing food and utilities while decreasing clothes and rent may not guarantee positive net - income as rent is a significant fixed expense and reducing it too much may not be practical. Also, increasing food and utilities may over - stretch the budget.

Step2: Analyze option b

Reducing rent and utilities can indeed lower overall expenses. Rent and utilities are relatively fixed but can sometimes be reduced (e.g., finding a cheaper place or conserving energy). This allows for more money for other expenses.

Step3: Analyze option c

Reducing food and clothes may not be the best way to free up money for fixed expenses. Food is a necessary expense and reducing it too much may not be healthy or sustainable.

Step4: Analyze option d

Budgets are always modifiable, so this option is incorrect.

Answer:

B. This budget can be modified by reducing the amount spent on rent and utilities, thereby reducing overall expenses to have the maximum amount of money for all other expenses.