The optimal trade-off between current consumption goods and future consumption goods is expressed as

Question

Quizplus · Accepted Answer

Option B is the only option that includes a graph that shows a concave curve, which represents the optimal trade-off between current consumption goods and future consumption goods. This curve shows that as more current consumption is chosen, the curve becomes steeper, meaning the opportunity cost of future consumption is increasing. The point where the curve intersects with the budget constraint represents the optimal point where the consumer can maximize their utility given their budget constraints. The other options either do not include a curve graph or show a linear relationship between current and future consumption, which is not representative of the optimal trade-off.

The Optimal Trade-Off Between Current Consumption Goods and Future Consumption