Question 52
EasyOriginal questionWith indifference curves, a consumer is in equilibrium where
Show the answer and explanation
CorrectNot quiteAnswer B
Correct answer: B
Explanation
The consumer wants the highest satisfaction he can afford: the highest indifference curve that still has a point on the budget line.
That curve just touches the line: at the point of tangency, MRS = P₁ ÷ P₂.
- Concept
- Optimal choice
- Typical timeTypical
- 40 s
- Your timeYours
- —
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