Which of the Following Is True About the Consumer's Optimum

question 60

Multiple Choice

Which of the following is true about the consumer's optimum consumption bundle? At the optimum,

• A) the slope of the indifference curve equals the slope of the budget constraint.
• B) the indifference curve is tangent to the budget constraint.
• C) the relative prices of the two goods equals the marginal rate of substitution.
• D) none of these answers are true.
• E) all answers a to c are true.

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Definitions:

Factoring Receivables

The financial transaction of selling accounts receivable to a third party (factor) at a discount to obtain immediate cash.

Factor

An element or component that contributes to a particular result or situation.

Bad Debts

Accounts receivable that are considered to be uncollectible, representing losses to the company.

Promissory Note

A monetary tool that includes a formal pledge from one entity to another to pay a certain amount of money, either when asked or on a predetermined date in the future.