When consumers maximize utility, they try to obtain:
A)a point of intersection between indifference curves.
B)any intersection of the budget line and the indifference curve.
C)the highest indifference curve that touches their budget constraint.
D)the lowest indifference curve that touches their budget constraint.

Question

Quizplus · Accepted Answer

Consumers aim to maximize their utility by choosing the highest indifference curve that touches their budget constraint. This is because any point on a higher indifference curve would be preferred to points on lower indifference curves, but the budget constraint limits the options available to the consumer. By selecting the highest indifference curve within budget constraints, the consumer is achieving the maximum level of utility possible given their budget.

When Consumers Maximize Utility, They Try to Obtain