When a consumer is purchasing the best combination of two goods, X and Y, subject to a budget constraint, we say that the consumer is at an optimal choice point. A graph of an optimal choice point shows that it occurs
A)along the lowest attainable indifference curve.
B)where the indifference curve crosses the budget constraint.
C)where the marginal utility per dollar spent is higher for X than for Y.
D)along the highest attainable indifference curve.

Question

Quizplus · Accepted Answer

The optimal choice point occurs along the highest attainable indifference curve because it represents the highest level of satisfaction a consumer can achieve given their budget constraint. This point is where the budget line is tangent to the indifference curve, indicating the most efficient allocation of resources for the consumer.

When a Consumer Is Purchasing the Best Combination of Two