The utility-maximizing combination on a given budget line occurs
A) on the highest indifference curve that appears on the indifference map.
B) on the lowest indifference curve that appears on the indifference map.
C) at the two points where an indifference curve intersects the budget line.
D) at the point where an indifference curve is tangent to the budget line.

Question

Quizplus · Accepted Answer

The utility-maximizing combination on a given budget line occurs at the point where an indifference curve is tangent to the budget line. This point represents the highest level of utility that can be achieved given the consumer's budget constraints.

The Utility-Maximizing Combination on a Given Budget Line Occurs