If an indifference curve intersects the budget constraint at two points, then ________
A) the consumer would be equally happy at either of those two points
B) optimal consumption is found by moving to a lower indifference curve
C) optimal consumption is found by moving to a lower budget constraint
D) the consumer will choose the point that minimizes consumption expenditure
A
You might also like to view...
When considering the demand for money, which two assets do we assume individuals can hold?
a. Stocks and bonds b. Money and stocks c. Money and bonds d. Checking accounts and savings accounts e. Money and real estate
Based on the rising housing prices of 2000-2005, many buyers opted for interest-only loans and variable rate mortgages with little or no down payment because
a. they expected short-term interest rates to fall substantially in the future and this would reduce their monthly mortgage payment in the years ahead. b. variable rate mortgages are a good way to reduce the risk accompanying your investment when you plan to stay in the house for a long time. c. they thought housing prices would continue to rise and therefore they would be able to sell the house for a profit within a couple of years. d. they could easily recoup their investment, even if there was a downturn in housing prices in the future.