Indifference Curves Are Convex to the Origin Because Of

question 21

Multiple Choice

Indifference curves are convex to the origin because of:

• A) transitivity of consumer preferences.
• B) the assumption of a diminishing marginal rate of substitution.
• C) the assumption that more is preferred to less.
• D) the assumption of completeness.
• E) none of the above

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Definitions:

Direct Materials

Raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Selling Costs

All costs that are incurred to secure customer orders and get the finished product or service into the hands of the customer.

Indirect Costs

Costs that are not directly traceable to a single product or operation, such as overhead.

Opportunity Costs

The potential benefit missed out on when choosing one alternative over another.