If the Combination of Two Goods Is a Point of Tangency

question 166

Multiple Choice

If the combination of two goods is a point of tangency between the budget line and an indifference curve, then:

• A) consumer equilibrium has not been achieved.
• B) all available income has been spent.
• C) utility can be increased by consuming less of both goods.
• D) utility can be decreased by consuming more of both goods.

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Definitions:

Hedge Effectiveness

The degree to which a hedge transaction reduces the risk of fluctuations in the cash flows or value of an underlying exposure.

Hedge Effectiveness

A measure of how well a hedge transaction reduces the risk of the exposure that the hedge was intended to protect against.

Economic Relationship

Refers to the interactions between different economic variables or entities, such as the connection between supply and demand or investment and economic growth.

Hedge Ratio

A ratio used to measure the proportion of a position that is hedged, indicating the effectiveness of a hedge against fluctuations.