Use the following to answer question(s): Consumer Equilibrium 2

-(Exhibit: Consumer Equilibrium 2) Given the exhibit, which of the following statements is (are) true?
A) Point I is the point of utility maximization.
B) At the point of utility maximization, the rate at which the consumer is willing to exchange one good for another is less than the rate at which the goods can be exchanged in the market.
C) MRSₓ,ᵧ Pₓ/Pᵧ
D) All of the above statements are true.

Question

Use the following to answer question(s): Consumer Equilibrium 2
 
-(Exhibit: Consumer Equilibrium 2) Given the exhibit, which of the following statements is (are) true?
A) Point I is the point of utility maximization. 
B) At the point of utility maximization, the rate at which the consumer is willing to exchange one good for another is less than the rate at which the goods can be exchanged in the market. 
C) MRSₓ,ᵧ > Pₓ/Pᵧ 
D) All of the above statements are true.

Quizplus · Accepted Answer

Point I represents the consumer's equilibrium where the indifference curve is tangent to the budget line, indicating utility maximization. At this point, the marginal rate of substitution (MRS) between two goods equals the ratio of their prices, contrary to statements B and C which suggest a discrepancy between these rates.

Use the Following to Answer Question(s): Consumer Equilibrium 2