Figure 6.1 -Refer to Figure 6.1.Which of the Following Statements Is True

question 119

Multiple Choice

Figure 6.1
-Refer to Figure 6.1.Which of the following statements is true?

• A)Quantities Q₀ and Q₁ are the utility-maximising quantities of meat pies at two different prices of meat pies.
• B)Quantities Q₀ and Q₁ may not necessarily be the utility-maximising quantities of meat pies at two different prices because we have no information on the consumer's budget or the price of other goods.
• C)Quantity Q₀ could be a utility-maximising choice if the price is $5.75, but quantity Q₁ may not be because we have no information on the marginal utility per dollar when price changes.
• D)Quantities Q₀ and Q₁ are derived independently of the utility-maximising model.

---

Definitions:

Bond Principle

The face value of a bond or the amount that the issuer agrees to pay the bondholder upon the maturity of the bond.

Yield To Maturity

The total return anticipated on a bond if the bond is held until its maturity date, taking into account both interest payments and capital gains or losses.

Coupon Rate

The interest rate on a bond that the issuer promises to pay to the bondholder until maturity.

Premium

The amount by which the price of something, especially a financial security, exceeds its principal or face value.