Convexity of the Indifference Curve Follows from

question 71

Multiple Choice

Convexity of the indifference curve follows from

• A) the fact that more is preferred to less.
• B) the fact that consumption and leisure are normal goods.
• C) the fact that consumers are indifferent to consumption and leisure goods.
• D) the fact that consumers prefer diversity.
• E) the fact that income plays a significant role in consumption and leisure decisions.

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Definitions:

Intermediate Product

Goods that are produced and used as inputs in the production of other goods, rather than being sold directly to consumers.

Processed Further

A decision in cost accounting regarding whether or not to continue adding value to a product beyond the split-off point.

Differential Revenue

The difference in revenue expected from two different business decisions or scenarios, often considered when evaluating options.

Variable Costs

Costs that vary in total dollar amount as the level of activity changes.