Suppose That There Are Two Commodities and a Consumer Prefers

question 33

Essay

Suppose that there are two commodities and a consumer prefers more to less of each good.If the consumer has transitive preferences, can her in difference curves cross? Sketch a brief proof of your answer, and illustrate with a diagram.

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Definitions:

Debt-To-Equity Ratio

A financial benchmark illustrating the relationship between the use of shareholder equity and debt in funding company assets.

Times Interest Earned

Times interest earned, also known as interest coverage ratio, measures a company's ability to make interest payments on its debt with its earnings before interest and taxes.

Debt-To-Equity Ratio

A metric outlining the balance of shareholder equity and debt in the financial composition for supporting a company's assets.

Equity Multiplier

A financial leverage ratio that indicates the portion of a company's assets that are financed by shareholders' equity.