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Figure: Harold's Indifference Curves
The figure shows three of Harold's indifference curves for bread and cheese.
-(Figure: Harold's Indifference Curves) Look at the figure Harold's Indifference Curves. If the price of bread is $2 per loaf, the price of cheese is $4 per pound, and Harold has $28 to spend on bread and cheese, Harold's optimal consumption bundle is _____ loaves of bread and _____ pounds of cheese.
A) 6; 4
B) 4; 3
C) 3; 2
D) 2; 8

Question

Use the following to answer questions:
Figure: Harold's Indifference Curves
The figure shows three of Harold's indifference curves for bread and cheese. 
-(Figure: Harold's Indifference Curves) Look at the figure Harold's Indifference Curves. If the price of bread is $2 per loaf, the price of cheese is $4 per pound, and Harold has $28 to spend on bread and cheese, Harold's optimal consumption bundle is _____ loaves of bread and _____ pounds of cheese.
A) 6; 4 
B) 4; 3 
C) 3; 2 
D) 2; 8

Quizplus · Accepted Answer

Harold's optimal consumption bundle is 6 loaves of bread and 4 pounds of cheese. This is because the indifference curve that is tangent to the budget line is the highest indifference curve that Harold can reach with his given budget.

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