The below figure shows the various combinations of the goods X and Y that yield different levels of utility. Figure 6.3
-In Figure 6.3,the consumer is in equilibrium at point:

Question

The below figure shows the various combinations of the goods X and Y that yield different levels of utility. Figure 6.3  
-In Figure 6.3,the consumer is in equilibrium at point:

Quizplus · Accepted Answer

The consumer is in equilibrium where the budget line is tangent to the highest possible indifference curve. At point B, the budget line is tangent to the indifference curve IC3, indicating that the consumer is maximizing their utility. Any other point would result in both a lower level of utility and/or an unspent budget. Therefore, B is the best choice for the consumer.

The Below Figure Shows the Various Combinations of the Goods