In terms of indifference curves, the optimal consumption bundle is determined by the:
A) intersection of a budget line and an indifference curve.
B) tangency of a budget line and an indifference curve.
C) tangency of a price consumption curve and an income consumption curve.
D) intersection of an income consumption curve and a price consumption curve.

Question

Quizplus · Accepted Answer

The optimal consumption bundle is where the budget line is tangent to an indifference curve, indicating the highest level of utility that can be achieved given the budget constraint.

In Terms of Indifference Curves, the Optimal Consumption Bundle Is