The optimal level of consumption is achieved when ________.
A)consumption in one period is equal to consumption in the next period
B)utility in one period is equal to utility in the next period
C)all income and wealth has been spent
D)the slope of the indifference curve is equal to the slope of the budget line

Question

Quizplus · Accepted Answer

The optimal level of consumption is achieved when the slope of the indifference curve (representing the consumer's preferences) is equal to the slope of the budget line (representing the prices and consumer's budget constraint). This occurs at the point where the consumer maximizes utility given their budget constraint. Therefore, choice D is the correct answer.

The Optimal Level of Consumption Is Achieved When ________