The indifference curves of two investors are plotted against a single budget line. Indifference curve A is shown as tangent to the budget line at a point to the left of indifference curve B's tangency to the same line
A) Investors A and B will hold the same portfolio.
B) Investors A and B will have different portfolios of the same standard deviation.
C) Investors A and B will have different portfolios of the same rate of return.
D) Investors A and B will have different portfolios but have the same level of risk aversion.
E) Investor A will expect to earn a lower rate of return than investor B.
E
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The slope of the consumption function is equal to the level of autonomous consumption
Indicate whether the statement is true or false
People take fewer trips by airplane when their incomes fall because of a recession. Trips by airplane must be
A) a normal good. B) an inferior good. C) a substitute for other goods. D) a complement to other goods. E) an inelastic good.