Use the Following to Answer Questions

question 62

Multiple Choice

Use the following to answer questions:
-(Table: Food and Clothing Bundles) Look at the table Food and Clothing Bundles. Teddy enjoys consuming food and clothing. The table shows five bundles of food and clothing that all provide Teddy with the same amount of utility. If units of food were put on a horizontal axis, what would we know about the shape of Teddy's indifference curve?

• A) It is horizontal.
• B) It is upward-sloping, with a declining marginal rate of substitution.
• C) It is downward-sloping, with a constant marginal rate of substitution.
• D) It is downward-sloping, with a declining marginal rate of substitution.

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Definitions:

Cash In Hand

The amount of liquid money or physical currency that a company or individual has readily available.

Bills Receivable

Financial documents representing money owed to a business by its customers that is payable within a short period.

Inventories

Quantities of goods and materials that a business holds for the purpose of sale or production.

Quick Ratio

A financial metric indicating a company's ability to meet short-term liabilities with its most liquid assets, excluding inventory.