What can we say about a consumption bundle selected by an optimizing consumer
A)Utility is maximized, and income is minimized.
B)Utility is maximized, and prices are minimized.
C)Utility is maximized subject to budget constraints.
D)Utility is maximized, and indifference curves are linear.

Question

Quizplus · Accepted Answer

An optimizing consumer seeks to maximize their utility subject to budget constraints, so the consumption bundle they select is the one that achieves the highest possible level of satisfaction given their budget. This means that the consumer will choose a combination of goods and services that provides the most satisfaction per dollar spent, while staying within their budget constraints. Therefore, choice C is the correct answer.

What Can We Say About a Consumption Bundle Selected by an Optimizing