Assume an Indifference Curve Yields a Consumer 1,000 Utils of Total

question 92

Multiple Choice

Assume an indifference curve yields a consumer 1,000 utils of total utility. If the consumer's budget increases by 50 percent, then the indifference curve:

• A) shifts rightward.
• B) shifts leftward.
• C) becomes more linear.
• D) is unchanged.

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Definitions:

Capital Gains

Capital gains are the profit made from the sale of an asset or investment which has increased in value over the holding period.

Current Income

Earnings derived from investments or employment that are received regularly, such as dividends or salaries.

High-Dividend Policy

A corporate strategy focusing on paying out a large portion of its earnings to shareholders in the form of dividends.