An interior solution to a consumer's utility maximization problem implies
A) consuming a positive amount of all goods.
B) consuming negative amounts of all goods.
C) consuming less than optimal amounts of all goods.
D) consuming more than an optimal amount of at least one good.

Question

Quizplus · Accepted Answer

An interior solution means that the consumer is consuming positive amounts of all goods. This is because an interior solution is where the consumer is not consuming the maximum or minimum amount of any good but instead consuming positive amounts of all goods while still satisfying the budget constraint and maximizing utility. Therefore, choice A is the correct answer.

An Interior Solution to a Consumer's Utility Maximization Problem Implies