Verlin Wants to Avoid a Common Mistake Often Made by New

question 37

Multiple Choice

Verlin wants to avoid a common mistake often made by new entrepreneurs.What advice would you give him?

• A)Spend as little as possible.
• B)Carry no inventory.
• C)Make sure he has adequate financing.
• D)Do without anything that is not absolutely essential.

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Definitions:

Convex Preferences

A preference structure where the consumer prefers mixed bundles of goods to extreme bundles, represented graphically by a bowed-inward indifference curve.

Monotonic Preferences

A preference pattern where more of a good is always preferred to less, maintaining a consistent order.

Utility Function

A mathematical representation of how different combinations of goods or services lead to different levels of happiness or satisfaction for an individual.

Income

Earnings from work or investments, often measured in terms of money received over a period of time.