Consumer equilibrium occurs where the budget line is tangent to the:
A) lowest possible indifference curve.
B) highest possible indifference curve.
C) utility maximizing indifference curve.
D) utility equalization indifference curve.

Question

Quizplus · Accepted Answer

Consumer equilibrium occurs at the point where the budget line is tangent to the highest possible indifference curve. This is because the highest indifference curve represents the highest level of satisfaction or utility that the consumer can achieve given their budget constraints.

Consumer Equilibrium Occurs Where the Budget Line Is Tangent to The