At her best affordable point,Kris
i.is on her budget line.
ii.is on the highest attainable indifference curve.
iii.has a marginal rate of substitution equal to the relative price of the goods.

Question

Quizplus · Accepted Answer

At her best affordable point, Kris is on her budget line, indicating she is utilizing her entire budget (i). She is also on the highest attainable indifference curve, which means she cannot reach a higher level of satisfaction given her budget constraints (ii). Additionally, at this point, her marginal rate of substitution (MRS) is equal to the relative price of the goods, ensuring that she is maximizing her utility given the prices of the goods and her budget (iii).

At Her Best Affordable Point,Kris