A consumer chooses an optimal consumption point where the
A)marginal rate of substitution is maximized.
B)slope of the indifference curve exceeds the slope of the budget constraint by the greatest amount.
C)ratio of the marginal utilities equals the ratio of the prices.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

At the optimal consumption point, the consumer equates the marginal rate of substitution (the ratio of marginal utilities) to the ratio of the prices, ensuring that the consumer is maximizing utility given their budget constraint.

A Consumer Chooses an Optimal Consumption Point Where the