If Two Bundles Are on the Same Indifference Curve,then

question 101

Multiple Choice

If two bundles are on the same indifference curve,then

• A)the consumer derives the same level of utility from each.
• B)the consumer derives the same level of ordinal utility from each but not the same level of cardinal utility.
• C)no comparison can be made between the two bundles since utility cannot really be measured.
• D)the MRS between the two bundles equals one.

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Definitions:

In The Money

Describes an option with intrinsic value, where call options have a strike price below the market price of the underlying, and put options have a strike price above it.

Underlying Stock Price

The current market price of the stock that is the subject of an option or other derivative investment vehicle.

January 20 Call

An options contract giving the holder the right to buy a specific asset at a predetermined price on or before January 20th.

T-Bill Rate

The yield or interest rate paid to investors in U.S. Treasury bills, which are short-term government securities.