Larry consumes at a point on his budget line where his marginal rate of substitution is less than the magnitude of the slope of his budget line. As Larry moves toward his consumer equilibrium point, he will move to a

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When Larry moves towards his consumer equilibrium point, he will choose to consume at a point where his marginal rate of substitution equals the magnitude of the slope of the budget line. This point will be on a higher indifference curve than the initial point where he consumed. Therefore, the correct choice is D - he will move to a higher indifference curve.

Larry Consumes at a Point on His Budget Line Where