All of the following are decisions made by individuals (assuming the individual is not an entrepreneur) except *

Portfolio selection

Household finance

Capital budgeting

None of the above

A theory that states that individuals seek to maximize their level of utility subject to a budget constraint is known as *

Production theory

Portfolio selection theory

Consumer choice theory

None of the above

In a perfect capital market *

Market interest rate of borrowing = market interest rate of lending

Market interest rate of borrowing < market interest rate of lending

Market interest rate of borrowing > market interest rate of lending

Borrowing and lending are not allowed

Consider the budget constraint for Adam who allocates $120 for his dairy purchases. The price of Labneh is $4 and the price of Cheese is $12. After 1 month, the vertical intercept (Labneh) dropped by 10 units. We can deduce that *

Then the initial vertical intercept was 30, the initial horizontal intercept was 10 and the drop in the vertical intercept is due to an increase in price of Labneh to $6 shown by a downward rotation on the Y-axis.

Then the initial vertical intercept was 20, the initial horizontal intercept was 5, the drop in the vertical intercept is due to to a decrease in price of Labneh to $6 shown by a upward rotation on the Y-axis.

Then the initial vertical intercept was 30, the initial horizontal intercept was 10, the drop in the vertical intercept is due to an unknown external factor causing a shift in the budget line.

Then the initial vertical intercept was 20, the initial horizontal intercept was 5, the drop in the vertical intercept is due to an unknown external factor causing a rotation in the budget line.