Figure 5-13 -If the Slope of an Indifference Curve Between Two Goods

question 131

Multiple Choice

Figure 5-13
-If the slope of an indifference curve between two goods decreases as we move from left to right (dropping all minus signs) , we infer that the consumer

• A)is less willing to trade away a good when he has a lot of it.
• B)is more willing to trade away a good when he has a lot of it.
• C)always tries to keep the percentage of his budget spent on each good constant.
• D)views one of the goods as inferior.

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Definitions:

Discounts

Reductions to the selling price of goods or services that can be applied for various reasons, such as to encourage prompt payment or to move inventory quickly.

Face Value

The nominal or dollar value printed on a bond or a stock certificate, representing the amount due to the holder at maturity.

Straight-Line Amortization

A method of evenly spreading the cost of an intangible asset over its useful life.

Bond Premium Amortization

The gradual expense recognition over time of the premium paid above the par value for a bond.