Which Statement Is True

question 38

Multiple Choice

Which statement is true?

• A)The further down a food and shelter budget line a consumer moves, the more of his budget he is spending
• B)When the price of good x (on the horizontal axis) falls and the price of good y rises, the budget line gets steeper
• C)When Pete adopts a corner solution he is definitely not maximizing utility
• D)The "composite good" is the amount of money the consumer has spent on good X in the two good optimizing model

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Definitions:

Net Income

The total profit of a business after all expenses, taxes, and costs have been subtracted from total revenues.

Asset Turnover

A measure of how effectively a business is using its assets to generate sales.

Return on Common Stockholders' Equity

A financial ratio that measures the amount of net income returned as a percentage of shareholders' equity, demonstrating the profitability of a company from the perspectives of its equity investors.

Price-Earnings Ratio

The price-earnings ratio (P/E ratio) is a measure used in financial analysis to assess a company's valuation by dividing its current share price by its earnings per share.