Which of the following is true if Clarice is at her consumer equilibrium?
i.Clarice is on her budget line.
ii.Clarice is on her highest attainable indifference curve.
iii.Clarice is dividing her budget equally across all goods.
A) i only
B) i and ii
C) i and iii
D) ii and iii
E) iii only

Question

Quizplus · Accepted Answer

If Clarice is at her consumer equilibrium, she is on the highest attainable indifference curve which represents the highest level of satisfaction she can achieve given her budget constraint. She is also on her budget line because she is spending all of her budget. However, there is no requirement that she divide her budget equally across all goods, so statement iii is not necessarily true.

Which of the Following Is True If Clarice Is at Her