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Figure: Optimal Choice 2
-(Figure: Optimal Choice 2) Refer to the figure. This figure represents indifference curves of a consumer who purchases flip-flops and sneakers. If the dotted line represents this consumer's budget constraint, then bundle D on the graph:
A) results in a lower level of overall utility than bundle E.
B) is preferred to point E but is unattainable.
C) has a higher marginal rate of substitution than bundle E.
D) maximizes total utility.

Question

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Figure: Optimal Choice 2 
-(Figure: Optimal Choice 2) Refer to the figure. This figure represents indifference curves of a consumer who purchases flip-flops and sneakers. If the dotted line represents this consumer's budget constraint, then bundle D on the graph:
A) results in a lower level of overall utility than bundle E. 
B) is preferred to point E but is unattainable. 
C) has a higher marginal rate of substitution than bundle E. 
D) maximizes total utility.

Quizplus · Accepted Answer

Bundle D is preferred to point E because it lies on a higher indifference curve, indicating higher utility. However, it is unattainable given the budget constraint represented by the dotted line. Therefore, the best choice would be bundle E which lies on the highest attainable indifference curve and is also within the budget constraint.

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