Which of the Following Is Held Constant Along an Indifference

question 165

Multiple Choice

Which of the following is held constant along an indifference curve?

• A)the prices of the goods in question
• B)the marginal rate of substitution between the two goods in question
• C)the marginal utility derived from consuming any bundle of goods on the indifference curve
• D)the total utility derived from consuming any bundle of goods on the indifference curve

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Definitions:

Discount Rate

The interest rate used in discounted cash flow (DCF) analysis to present value future cash flows, or in the context of bond investments, it is the interest rate used by investors to compare different bond issues.

Capital Lease

A lease considered as a purchase of an asset, where the lessee records the leased asset as if it were owned.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset, typically defined in a lease agreement.

Implicit Rate

The interest rate implied by the cash flows of a lease, not explicitly stated within the lease agreement.