If the Combination of Two Goods Occurs at a Point

question 346

Multiple Choice

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

• A)utility has been maximized.
• B)some available income has not been spent.
• C)utility can be decreased by consuming more of both goods.
• D)utility can be increased by consuming more of one good and less of the other.

---

Definitions:

Financing Activities

Transactions that result in changes in the size and composition of the equity capital or borrowings of a company.

Cash Flow

The total volume of financial transfers happening within a business, crucially affecting its ability to handle financial obligations.

Net Cash Flow

The difference between a company's cash inflows and outflows within a specified period.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating its leverage level.