In an indifference curve/budget line diagram, at your consumer equilibrium, that is, your best affordable point, which of the following statements is CORRECT?
A) Any movement upward or downward on your budget line will move you to a less preferred point.
B) Any movement upward or downward on your indifference curve will move you to a less preferred point.
C) Your marginal rate of substitution is greater than the magnitude of the budget line by as much as possible.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

At consumer equilibrium, the best affordable point is where the budget line is tangent to the indifference curve, meaning any movement along the budget line will lead to a less preferred point.

In an Indifference Curve/budget Line Diagram, at Your Consumer Equilibrium