refer to the following diagram -The highest level of utility the worker can possibly achieve is: A)I₁,if P is a normal-profit isoprofit curve B)I₂,if P is a normal-profit isoprofit curve C)I₁,if P represents a positive economic profit D)I₃,if P is a normal-profit isoprofit curve

Question

Quizplus · Accepted Answer

The highest level of utility the worker can possibly achieve is where the highest attainable indifference curve (IS1U1) is tangent to the budget line (B12S1). This occurs when the isoprofit curve (P) is a normal-profit curve, which is represented by B12S1U1B0. Therefore, the correct answer is B.

Refer to the Following Diagram