The point where the slope of the budget constraint equals the slope of the indifference curve is termed consumer equilibrium.

Question

Quizplus · Accepted Answer

At consumer equilibrium, the slope of the budget constraint (which represents the ratio of the prices of two goods) equals the slope of the indifference curve (which represents the marginal rate of substitution between those two goods), indicating the consumer is maximizing utility given their budget.

The Point Where the Slope of the Budget Constraint Equals