A Consumer's Utility-Maximising Combination of Goods Is Given by the Bundle

question 199

Multiple Choice

A consumer's utility-maximising combination of goods is given by the bundle that corresponds to the point on

• A)the indifference curve that intersects the horizontal axis.
• B)the indifference curve that intersects the vertical axis.
• C)an indifference curve that is tangent to the budget constraint.
• D)the budget constraint where it intersects one of the axes.

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Definitions:

Import Quotas

Restrictions set by a government on the quantity of goods that can be imported into a country.

Net Exports

The value of a country's total exports minus its total imports, representing the net effect of foreign trade on an economy.

Capital Flight

A large and sudden reduction in the demand for assets located in a country

Interest Rate

The percentage of a loan that is applied as interest for the borrower, usually shown as a yearly rate.