Suppose a Manager's Preferences Depend Only on Quantity

question 130

Multiple Choice

Suppose a manager's preferences depend only on quantity.Such a manager will then have an indifference curve that

• A)is tangent to the profit curve somewhere between quantities of 0 and 2.5.
• B)is tangent to the profit curve somewhere between quantities of 2.5 and 5.
• C)intersects the profit curve at a quantity exactly equal to 2.5.
• D)intersects the profit curve at a quantity exactly equal to 5.

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Definitions:

Marketable Securities

Financial instruments and assets that are easily convertible into cash, typically with high liquidity and short maturities.

Current Ratio

A financial metric indicating the capacity of a business to meet its obligations due within the next year, determined by dividing its current assets by its current liabilities.

Acid-Test Ratio

The acid-test ratio is a liquidity metric that measures a company's ability to cover its short-term liabilities with its quick assets (excluding inventory).

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.