Which of the following statements is true? A) Corner solutions always satisfy the tangency condition. B) Interior solutions may or may not satisfy the tangency condition. C) Interior solutions always satisfy the tangency condition. D) Whenever the consumer purchases good X but not good Y, then MRS_XY ≤ P_X/P_Y at the chosen bundle.

Question

Quizplus · Accepted Answer

Interior solutions always satisfy the tangency condition, which is where the consumer's indifference curve is tangent to the budget constraint, indicating an optimal consumption bundle.

Which of the Following Statements Is True