Higher Indifference Curves Are Preferred to Lower Ones as Long

question 409

Multiple Choice

Higher indifference curves are preferred to lower ones as long as the

• A)marginal rate of substitution is diminishing.
• B)products in the bundle are "bads" and not "goods."
• C)products in the bundle are "goods" and not "bads."
• D)budget constraint does not shift.

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Definitions:

Profit

The income earned when the total revenue from business activities surpasses all related expenses, costs, and taxes.

Clearinghouse

A financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions.

Exercise

In finance, it refers to the act of executing one's right to buy or sell the underlying asset in options trading.

Futures Contract

A standardized agreement to buy or sell a specific asset at a predetermined price at a specified time in the future.