Figure 3-1 shows the preferences of a consumer toward reading books and watching movies.Refer to Figure 3-1.ref SHAPE \* MERGEFORMAT Which of the following is the point at which the consumer maximizes his utility?
A)A
B)C
C)D

Question

Figure 3-1 shows the preferences of a consumer toward reading books and watching movies.Refer to Figure 3-1.ref SHAPE \* MERGEFORMAT Which of the following is the point at which the consumer maximizes his utility? 
A)A 
B)C 
C)D

Quizplus · Accepted Answer

The point where the consumer maximizes his utility is at the highest possible indifference curve, which is tangential to the budget constraint. In this case, the tangential point is at point C, where the consumer spends $20 on books and $30 on movies. At point C, the consumer is able to achieve the highest possible utility given his budget constraint.

Figure 3-1 Shows the Preferences of a Consumer Toward Reading