Suppose a Manager's Preferences Depend Only on Profit

question 130

Multiple Choice

Suppose a manager's preferences depend only on profit.Such a manager will then have an indifference curve that:

• A) is tangent to the profit curve somewhere between quantities of 0 and 2.5.
• B) is tangent to the profit curve somewhere between quantities of 2.5 and 5.
• C) is tangent to the profit curve at a quantity exactly equal to 2.5.
• D) intersects the profit curve at a quantity exactly equal to 5.

---

Definitions:

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets, indicating its financial health.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business.

Measure Of Liquidity

An assessment of how easily and quickly an asset can be converted into cash without significantly affecting its value.

Debt To Total Assets

A ratio that indicates the proportion of a company's assets financed through debt.