When a consumer is consuming at a point where his or her budget line is not as steep as his or her indifference curve, then he or she should
A) consume more of the good that is measured on the horizontal axis.
B) consume less of the good that is measured on the horizontal axis.
C) not change his or her behavior.
D) consume none of the good that is measured on the horizontal axis.

Question

Quizplus · Accepted Answer

When the budget line is not as steep as the indifference curve, the marginal rate of substitution (MRS) is greater than the price ratio, indicating that the consumer values the good on the horizontal axis more than its cost. Therefore, the consumer should consume more of that good to reach a higher level of utility.

When a Consumer Is Consuming at a Point Where His