A utility maximizing bundle is:
A)the bundle which satiates the consumer's desires.
B)inside the budget line and on an indifference curve.
C)on a budget line tangent to an indifference curve.
D)at the origin of the indifference map.

Question

Quizplus · Accepted Answer

A utility maximizing bundle is a bundle of goods that maximizes the consumer's utility or satisfaction, subject to their budget constraint. This occurs where the budget line is tangent to the highest possible indifference curve and the bundle of goods on this indifference curve is the desired utility-maximizing bundle. Therefore, choice C is the correct answer as it describes the utility-maximizing bundle.

A Utility Maximizing Bundle Is