A corner point solution is always the optimum for a consumer when:
A)a unique point of tangency exists between the consumer's indifference curve and the budget line.
B)the consumer has straight line (constant slope)indifference curves.
C)there is no point of tangency between the consumer's indifference curves and the budget line and the consumer does not have straight line indifference curves.
D)the consumer is indifferent to both goods equally.

Question

Quizplus · Accepted Answer

When there is no point of tangency and the indifference curves are not straight lines, the optimum solution occurs at a corner point where the budget line meets one of the axes.

A Corner Point Solution Is Always the Optimum for a Consumer