Figure 21-18

-Refer to Figure 21-18.Assume that the consumer depicted in the figure has an income of $20.The price of Skittles is $2 and the price of M&M's is $4.The consumer's optimal choice is point
A) A.
B) B.
C) C.
D) D.

Question

Figure 21-18
 
-Refer to Figure 21-18.Assume that the consumer depicted in the figure has an income of $20.The price of Skittles is $2 and the price of M&M's is $4.The consumer's optimal choice is point
A) A. 
B) B. 
C) C. 
D) D.

Quizplus · Accepted Answer

The consumer's optimal choice is point A because it is the point on the budget line where the consumer's indifference curve is tangent to the budget line. This means that the consumer is getting the most satisfaction possible from their consumption of Skittles and M&M's given their budget constraint.

Figure 21-18 -Refer to Figure 21-18.Assume That the Consumer Depicted in the Consumer