At the consumer's utility maximizing bundle that uses all of her budget, the slope of the budget constraint is ______ the slope of the indifference curve.
A) greater than
B) equal to
C) less than
D) indeterminately different from

Question

Quizplus · Accepted Answer

At the utility maximizing bundle, the marginal rate of substitution (MRS) between the two goods will be equal to the price ratio (slope of the budget constraint), thus making the slope of the indifference curve equal to the slope of the budget constraint.

At the Consumer's Utility Maximizing Bundle That Uses All of Her