Which of the Following Statements Is Correct

question 7

Multiple Choice

Which of the following statements is correct?

• A) Along the budget line, consuming more of one good implies consuming more of the other.
• B) The slope of the budget line shows the opportunity cost of the good measured along the x-axis.
• C) The slope of the budget line shows there is no tradeoff between the two goods because the consumer can buy each of them.
• D) If the consumer's budget increases, the budget line shifts leftward and its slope does not change.
• E) None of the above answers is correct.

---

Definitions:

Corporation

A legal entity that is separate and distinct from its owners, providing them with limited liability, and recognized as having rights and responsibilities.

Preferred Stock

A security that entitles the holder to payment of fixed dividends and that has priority over common stock in the distribution of assets on the corporation’s dissolution.

Common Stock

A type of equity security that represents ownership in a corporation, with holders usually having a right to vote on corporate matters.

Payment Of Dividends

The distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.