Figure 21-25
The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y.
-Refer to Figure 21-25. Suppose the price of good X is $10, the price of good Y is $5, and the consumer's income is $210. Then the consumer's optimal choice is represented by a point on which curve?
A) I1
B) I2
C) I3
D) I4

Question

Figure 21-25
The figure pertains to a particular consumer. On the axes, X represents the quantity of good X and Y represents the quantity of good Y. 
-Refer to Figure 21-25. Suppose the price of good X is $10, the price of good Y is $5, and the consumer's income is $210. Then the consumer's optimal choice is represented by a point on which curve?
A) I1 
B) I2 
C) I3 
D) I4

Quizplus · Accepted Answer

The consumer's optimal choice is determined by the budget constraint and the highest indifference curve they can reach. With the given prices and income, the consumer can afford combinations of goods that lie on the budget line. The optimal choice is where this budget line is tangent to the highest indifference curve, which is I2 in this scenario.

Figure 21-25 The Figure Pertains to a Particular Consumer. on the Axes