If Two Goods Are Both Desirable and Preferences Are Convex

question 9

Multiple Choice

If two goods are both desirable and preferences are convex, then

• A)there must be a kink in the indifference curves.
• B)indifference curves must be straight lines.
• C)if two bundles are indifferent, then an average of the two bundles is worse than either one.
• D)the marginal rate of substitution is constant along indifference curves.
• E)None of the above.

Understand the significance of net income allocation and its impact on shareholders' equity and dividends.

Recognize the impact of negative cash flow from assets and the factors contributing to it.

Understand the factors that affect cash flow within a business.

Analyze the impact of business transactions on shareholders' equity and net working capital.

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Definitions:

State Unemployment

A program providing financial assistance to unemployed workers from their state government.

Federal Unemployment Taxes

Taxes paid by employers to the federal government to fund unemployment benefits for workers who lose their jobs.

Payroll Tax Expense

Taxes that employers are required to pay on behalf of their employees, such as social security and Medicare taxes.

Wage Base Limits

The maximum amount of income that is subject to social security or other payroll taxes within a tax year.