An Indifference Curve Shows

question 168

Multiple Choice

An indifference curve shows

• A)various combinations of two goods that give the consumer the same amount of utility.
• B)the quantities of a good that give the consumer maximum utility when compared directly to price.
• C)the relationship between the price and quantity of a good that a consumer is able to purchase.
• D)the relationship between the quantity of a good and maximum utility.
• E)the relationship between total and marginal utility.

---

Definitions:

Weighted Average Cost

The total cost of goods available for sale divided by the number of goods available for sale, giving each item a weight proportional to its cost.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate them for the risk of investing in the company.

Pre-tax Cost

The cost of an investment or expense before the application of taxes, representing the gross expense.

Market Price

The rate at present for the purchase or sale of a service or asset.