The Optimal Combination of Goods for a Consumer to Purchase

question 133

Multiple Choice

The optimal combination of goods for a consumer to purchase is shown by

• A)any intersection of the indifference curve and the budget line.
• B)the point where the budget line touches the vertical axis.
• C)a point of tangency between the budget line and the indifference curve.
• D)the point at which the indifference curve parallels the horizontal axis.
• E)the intersection of two indifference curves.

---

Definitions:

Treasury Bonds

Long-term government debt securities with a fixed interest rate and maturity of more than ten years, issued by the U.S. Treasury.

Dow Jones Industrial Average (DJIA)

An index in the stock market tracking the performance of 30 major companies traded on U.S. stock exchanges.

Blue Chip Stocks

Shares in large, reputable companies known for their ability to operate profitably in good and bad times.

Stock Splits

A corporate action that increases the number of a company's outstanding shares by dividing each share, which in turn reduces the price of each share, aiming to make shares more affordable.