Figure 21-18
-Refer to Figure 21-18. Bundle C represents a point where

Question

Figure 21-18 
-Refer to Figure 21-18. Bundle C represents a point where

Quizplus · Accepted Answer

Bundle C represents a point where marginal utility per dollar spent on both goods is equal. Therefore, the best choice would be a combination of goods that lie on the Budget Line AB, where the slope of the line represents the ratio of prices of the two goods. Bundle B is the only option that lies on AB and also on the highest indifference curve, indicating maximum utility.

Figure 21-18 -Refer to Figure 21-18. Bundle C Represents a Point Where