A consumer will consume the combination of goods at the point of tangency between the budget line and the indifference curve.

Question

Quizplus · Accepted Answer

This statement is true according to the theory of consumer choice. The point of tangency between the budget line and the indifference curve represents the optimal consumption choice for the consumer, where they are maximizing their utility while staying within their budget constraint.

A Consumer Will Consume the Combination of Goods at the Point