An Optimizing Consumer Will Select the Consumption Bundle in Which

question 139

Multiple Choice

An optimizing consumer will select the consumption bundle in which the

• A)ratio of total utilities is equal to the relative price ratio.
• B)ratio of income to price equals the marginal rate of substitution.
• C)marginal rate of substitution is equal to the relative price ratio of the goods.
• D)marginal rate of substitution is equal to marginal utility.

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Definitions:

New Equity

Funds raised by a company through the issuance of common stock to the public or private investors.

Quarterly Dividend

A dividend payment made by a company to its shareholders four times a year, typically every three months.

Flotation Costs

The costs associated with issuing new securities, including underwriting, legal, and registration fees, which are incurred by a company when it issues new stocks or bonds.

New Equity

Refers to the issuance of shares by a company to raise capital, which dilutes existing ownership but can provide funds for expansion or debt reduction.