Which of the following is true about the consumer's optimum consumption bundle? At the optimum,
A) the slope of the indifference curve equals the slope of the budget constraint.
B) the indifference curve is tangent to the budget constraint.
C) the relative prices of the two goods equals the marginal rate of substitution.
D) none of these answers are true.
E) all answers a to c are true.

Question

Quizplus · Accepted Answer

At the consumer's optimum consumption bundle, the slope of the indifference curve equals the slope of the budget constraint, the indifference curve is tangent to the budget constraint, and the relative prices of the two goods equal the marginal rate of substitution.

Which of the Following Is True About the Consumer's Optimum