In the Utility Maximizing Model, Consumer Preferences Are Assumed to Be

question 170

Multiple Choice

In the utility maximizing model, consumer preferences are assumed to be transitive.What does this mean?

• A)that consumers prefer more of a good to less
• B)that consumers have the freedom to change their preferences from time to time
• C)that consumers have preferences that are relatively consistent in the time period under consideration
• D)that consumers go through cycles in their consumption behavior

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Definitions:

Contributed Capital

The total value of the capital that shareholders have directly invested in the company through the purchase of its stock.

Earned Capital

The portion of shareholders' equity derived from profitable operations, representing retained earnings and not contributed capital.

Common Shares

Equity investments that represent a unit of ownership in a corporation and give shareholders voting rights and dividends.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, giving more weight to some numbers than others.