A Consumer Cannot Be Indifferent About Two Combinations That Yield

question 156

Multiple Choice

A consumer cannot be indifferent about two combinations that yield disparate levels of utility.Therefore,an indifference curve cannot be

• A) flat.
• B) linear.
• C) thin.
• D) thick.
• E) segmented.

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Definitions:

Credit Scoring

A system used by lenders to evaluate the creditworthiness of potential borrowers, resulting in a score that predicts the likelihood of repayment.

Probability of Default

The probability that a borrower will fail to fulfill their debt responsibilities.

Credit Policy

The guidelines a company follows to determine the amount and terms of credit to extend to customers.

5 C's of Credit

Refers to the five key elements a lender considers when assessing the creditworthiness of a potential borrower: character, capacity, capital, collateral, and conditions.