Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $3,the consumer would maximize utility at point
A)A.
B)B.
C)C.
D)D.

Question

Use the indifference curves and the budget lines in Figure 19.3 to answer the indicated question.Assume the price of Y is $1 per unit.If the price per unit of good X is $3,the consumer would maximize utility at point 
A)A. 
B)B. 
C)C. 
D)D.

Quizplus · Accepted Answer

At point A, the budget line is tangent to the highest achievable indifference curve, indicating the maximum utility. At point B and C, the budget constraint cuts through lower indifference curves, meaning there are other points where the consumer can achieve greater utility. At point D, the budget constraint doesn't even touch an indifference curve, so it is clearly inefficient. Therefore, point A is the optimal choice for the consumer.

Use the Indifference Curves and the Budget Lines in Figure