Use the following to answer question(s): Consumer Equilibrium 3

-(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point K.Given budget constraint FL, utility can:
A) be increased by consuming more of good A and less of good B.
B) be increased by consuming less of good A and more of good B.
C) be increased by consuming more of both goods.
D) not be increased.

Question

Use the following to answer question(s): Consumer Equilibrium 3
 
-(Exhibit: Consumer Equilibrium 3) Assume that you are consuming the combination of goods at point K.Given budget constraint FL, utility can:
A) be increased by consuming more of good A and less of good B. 
B) be increased by consuming less of good A and more of good B. 
C) be increased by consuming more of both goods. 
D) not be increased.

Quizplus · Accepted Answer

At point K, the consumer is not on the budget line FL, indicating they are not utilizing their budget fully to achieve the highest possible utility. By moving towards the budget line (specifically towards a point where the budget line is tangent to an indifference curve), the consumer can increase utility. This can be achieved by consuming more of good A and less of good B, moving closer to the budget constraint and reaching a higher indifference curve.

Use the Following to Answer Question(s): Consumer Equilibrium 3