Figure 3-2 Shows the Preferences of a Consumer for Two

question 78

Multiple Choice

Figure 3-2 shows the preferences of a consumer for two goods,guns and butter.
-Refer to Figure 3-2.Which of the following is true?

• A)Point E is an unattainable market basket for the consumer.
• B)Point E is the point at which the consumer will maximize his satisfaction.
• C)The consumer is indifferent between points F and G.
• D)The consumer would rather consume at point E than at either F or G.

---

Definitions:

Cash Cycle

The period between the outlay of cash for the purchase of inventory and the receipt of cash from accounts receivable, representing the time it takes for a company to turn its investments in inventory back into cash.

Receivables Factoring

The process of selling a business's accounts receivable to a third party at a discount to quickly generate cash.

Bad Debts

Financial amounts owed to a company that are unlikely to be paid by debtors, often recognized as an expense on the company's income statement.

Discounted Amount

The present value of a future sum of money or stream of cash flows given a specific rate, reflecting the time value of money.