Figure 21-24 the Figure Shows Three Indifference Curves and a Budget

question 179

Multiple Choice

Figure 21-24 The figure shows three indifference curves and a budget constraint for a certain consumer named Steve.
-Refer to Figure 21-24. Steve

• A)gains 1.1 pounds of pears and becomes better off by moving from point A to point B.
• B)gains 1.1 pounds of pears and becomes better off by moving from point A to point C.
• C)gains 1.1 pounds of pears and becomes better off by moving from point B to point C.
• D)gives up 1.1 pounds of pears and becomes better off by moving from point C to point B.

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Definitions:

May 40 Call

An options contract that gives the holder the right, but not the obligation, to buy a stock at a price of $40 per share before or on its expiration in May.

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A hypothetical or generic naming for a stock used in examples; not a specific financial term.

Positive Earnings

When a company’s income, excluding losses and expenses, is more than zero indicating profitability.

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