When indifference curve analysis is used, a consumer optimum occurs at the point at which
A) the indifference curves intersect.
B) the indifference curve is tangent to the budget line.
C) total utility is maximum.
D) marginal utility/price ratio of all goods consumed is equal.
Answer: B
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The labor supply curve facing a monopsonist is
a. downward sloping b. upward sloping c. a horizontal line d. backward bending e. a vertical line
If unemployment and inflation move inversely, then we can infer that business fluctuations are
a. from the demand side. b. from the supply side. c. from both the demand and supply side. d. purely random events.
If a bank has actual reserves of $40,000 and a 20 percent reserve requirement, then the maximum amount of checkable deposits the bank can have if excess reserves are zero is
a. $100,000. b. $80,000. c. $300,000. d. $20,000. e. $200,000.
If a country's consumer price index (CPI) was 104.2 in Year 1, while the inflation rate for Year 2 was 4.89%, then the CPI in Year 2 was:
(a) 106.5; (b) 108.5; (c) 109.3; (d) 111.5.