Exhibit 10-4 Refer to Exhibit 10-4.If a consumer were at Point B on the budget line:

Question

Exhibit 10-4  Refer to Exhibit 10-4.If a consumer were at Point B on the budget line:

Quizplus · Accepted Answer

At point B, the consumer is not at the optimal position. The optimal position is where the budget line and indifference curve are tangent, and in this case, it would be at a point to the left of point B. Therefore, the consumer could make herself better off by consuming less clothing (moving leftward on the budget line) and more food (moving upward on the budget line) as she can still afford to do so with her given level of income.