Figure 6.6
-Refer to Figure 6.6.Given the budget constraint in the diagram, which of the following statements is false?
A)The consumer receives the same level of utility from consumption bundles d, e and f.
B)Consumption bundles b and c yield the same level of utility, which is higher than the utility represented by bundle a.
C)Although the consumer receives the same level of utility from bundles d and e, she cannot afford to purchase bundle d.
D)The consumer's optimal bundle could be bundle d, e or f.

Question

Figure 6.6 
-Refer to Figure 6.6.Given the budget constraint in the diagram, which of the following statements is false?
A)The consumer receives the same level of utility from consumption bundles d, e and f. 
B)Consumption bundles b and c yield the same level of utility, which is higher than the utility represented by bundle a. 
C)Although the consumer receives the same level of utility from bundles d and e, she cannot afford to purchase bundle d. 
D)The consumer's optimal bundle could be bundle d, e or f.

Quizplus · Accepted Answer

The consumer's optimal bundle is the one that is on the highest indifference curve that is still affordable given the budget constraint. In this case, the optimal bundle could be bundle d, e, or f, because they all lie on the same indifference curve and are affordable. Bundle a has the lowest utility, while bundles b and c have higher utility but are not affordable. Bundle d and e have the same utility but only bundle e is affordable. Bundle f has the highest utility but is not affordable. Therefore, the optimal bundle must be one of the options that are both affordable and on the highest indifference curve.

Figure 6.6 -Refer to Figure 6.6.Given the Budget Constraint in the Diagram