An individual consuming two goods, X and Y, has the usual downward-sloping, convex indifference curves.All except one of the following will characterize the optimal consumption point.Which is the exception?
A)the intersection of an indifference curve and the budget line at the optimal
B)point tangency between an indifference curve and the budget line at the
C)optimal point the optimal consumption point lying on the budget line
D)maximal utility at the optimal consumption point

Question

Quizplus · Accepted Answer

The optimal consumption point is characterized by the tangency between the indifference curve and the budget line, not their intersection.

An Individual Consuming Two Goods, X and Y, Has the Usual