If an Indifference Curve Intersects the Budget Constraint at Two

question 68

Multiple Choice

If an indifference curve intersects the budget constraint at two points,then ________.

• A)the consumer would be equally happy at either of those two points
• B)optimal consumption is found by moving to a lower indifference curve
• C)optimal consumption is found by moving to a lower budget constraint
• D)the consumer will choose the point that minimizes consumption expenditure

---

Definitions:

Sustainable Earnings

The portion of a company's profits considered to be repeatable, stable, and able to be maintained over the long term.

P/E Ratio

A valuation metric that compares a company's stock price to its earnings per share, indicating how much investors are willing to pay per dollar of earnings.

Present Value

The computed present value of a future monetary sum or cash flow sequence, utilizing an established rate of return.

Growth Opportunities

Potential scenarios or plans a business can embark on to increase profits, expand its operations, or enter new markets.