Figure 21-16
-Refer to Figure 21-16. The price of X is $5, the price of Y is $20, and the consumer's income is $40. Which point represents the consumer's optimal choice?
A)A
B)B
C)C

Question

Figure 21-16 
-Refer to Figure 21-16. The price of X is $5, the price of Y is $20, and the consumer's income is $40. Which point represents the consumer's optimal choice?
A)A 
B)B 
C)C

Quizplus · Accepted Answer

The consumer's optimal choice is where the budget line is tangent to the highest possible indifference curve. Given the prices and income, the consumer can afford combinations of X and Y that lie on the budget line. Point C is likely where the budget line is tangent to an indifference curve, representing the optimal choice.

Figure 21-16 -Refer to Figure 21-16. the Price of X Is $5