Identify the Statement That Is False

question 53

Multiple Choice

Identify the statement that is false.

• A) An increase in the amount of income changes the intercepts of the budget constraint but not the slope.
• B) An increase in the price of good changes both the -intercept and the slope of the budget constraint.
• C) An increase in the price of good and an equal percentage increase in the price of good changes the -intercept, the -intercept, and the slope of the budget constraint.
• D) An increase in the price of good and an increase in the price of good may or may not change the slope of the budget constraint.

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Definitions:

Cash Dividend

A payment made by a company to its shareholders, usually as a distribution of profits.

Paid-in Capital

Funds received by a company from selling its shares to investors, representing the capital provided by shareholders for use in the business.

Common Stock

A type of security that represents ownership in a corporation, with holders typically having voting rights and potentially receiving dividends.

Noncumulative

Describes preferences or rights that do not carry over or accumulate if they are not used within a certain period.