A consumer equilibrium is depicted using indifference curve analysis as:
A) the point where two indifference curves cross.
B) the combination of two goods that minimizes total utility for a given level of income.
C) the combination of two goods located where the highest attainable indifference curve is just tangent to the budget line.
D) any combination of two goods where an indifference curve crosses the budget line.

Question

Quizplus · Accepted Answer

Consumer equilibrium is achieved at the point where the highest attainable indifference curve is just tangent to the budget line. This is because at this point, the consumer is maximizing their utility given their budget constraint. Therefore, choice C is the correct option.

A Consumer Equilibrium Is Depicted Using Indifference Curve Analysis As