Assume an Indifference Map with Other Goods on the Vertical

question 31

Multiple Choice

Assume an indifference map with other goods on the vertical axis and health on the horizontal axis.The government provides families with $400 vouchers that can be redeemed for healthcare services at any hospital,public or private.The budget line for a family that avails this voucher scheme will:

• A)be negatively sloped.
• B)be positively sloped up to $400 and then have a zero slope.
• C)have a zero slope up to $400 and then have a negative slope.
• D)be a straight line with an infinite slope.

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Definitions:

Defective Corporation

A corporation that has not been properly formed due to a failure in fulfilling statutory requirements, yet may still be recognized as a corporation.

Equity Securities

Financial assets that represent ownership interest in a company, such as stocks.

Debt Securities

represent money that is borrowed and must be repaid, with terms that define the amount borrowed, interest rate, and maturity date, commonly issued in the form of bonds, notes, or bills.

Bonds

Debt securities issued by corporations or governments to raise funds, whereby the issuer owes the holders a debt and is obliged to pay interest.