The point where the indifference curve is tangent to the budget line
A) is the best affordable point.
B) is where the marginal rate of substitution exceeds the relative price by as much as possible.
C) is a point on consumer's demand curve.
D) All of the above answers are correct.

Question

Quizplus · Accepted Answer

The point where the indifference curve is tangent to the budget line is the best affordable point because it represents the combination of goods that maximizes the consumer's utility within their budget constraint.

The Point Where the Indifference Curve Is Tangent to the Budget