Suppose Arun Consumes Only 2 Goods - Books and CDs

question 120

Multiple Choice

Suppose Arun consumes only 2 goods - books and CDs - and has a set of downward sloping indifference curves.As Arun moves from one point to another on a particular indifference curve,

• A)the combination of books and CDs will vary,but the level of utility remains constant.
• B)the combination of books and CDs that Arun prefers will remain constant,but the level of satisfaction will vary.
• C)the combination of books and CDs and Arun's income level will remain constant.
• D)Arun's level of satisfaction will vary as the combinations of books and CDs varies.
• E)Arun is consuming the same combination of goods,but with varying levels of income.

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Definitions:

Current Ratio

The Current Ratio is a financial metric used to evaluate a company's ability to pay its short-term liabilities with its short-term assets, indicating liquidity.

Prepaid Items

Expenses paid in advance for goods or services to be received in the future.

Statement of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company, showing how the company's operations are running, where its money is coming from, and how it is being spent.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing how much of the asset's value has been used.