Diagrams illustrating the consumption choices for a corporation show the two period trade-off as originating in the northwest quadrant, or (-X, Y), because:
A) corporations have a tendency to waste resources.
B) unlike an individual, corporations have no consumption endowment.
C) each investor cannot maximize their own consumption.
D) people differ in tastes and preferences.

Question

Quizplus · Accepted Answer

Corporations differ from individuals in that they do not have a consumption endowment to allocate between periods; instead, their decisions are based on investment and returns, which is why the trade-off is illustrated as originating in the (-X, Y) quadrant, indicating a focus on investment (negative consumption in the present) for future returns.

Diagrams Illustrating the Consumption Choices for a Corporation Show the Two