If Preferences Are Transitive, Indifference Curves

question 107

Multiple Choice

If preferences are transitive, indifference curves

• A)intersect at the equilibrium consumption bundle.
• B)intersect at the optimum consumption bundle.
• C)intersect where the marginal rate of substitution for each indifference curve is equal.
• D)do not intersect.

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Definitions:

Profit Centers

Divisions or units within a business that are directly responsible for generating profits.

Contribution Margin

The difference between sales revenue and variable costs of production, used to cover fixed costs and generate profit.

Controllable Fixed Costs

Fixed costs that management has the ability to influence or change in the short term, such as advertising expenses.

Controllable Margin

The portion of profit or contribution margin that a manager has direct control over, before fixed costs and overhead are deducted.