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Figure: Optimal Choice
-(Figure: Optimal Choice) Refer to the figure. Suppose the figure represents indifference curves of a consumer who purchases flip-flops and sneakers. If the dotted line represents this consumer's budget constraint, then Bundle D on the graph:
A) results in a lower level of overall utility than Bundle E.
B) is preferred to point E but unattainable.
C) has a higher marginal rate of substitution than Bundle E.
D) maximizes total utility.

Question

Use the following to answer questions:
Figure: Optimal Choice 
-(Figure: Optimal Choice) Refer to the figure. Suppose the figure represents indifference curves of a consumer who purchases flip-flops and sneakers. If the dotted line represents this consumer's budget constraint, then Bundle D on the graph:
A) results in a lower level of overall utility than Bundle E. 
B) is preferred to point E but unattainable. 
C) has a higher marginal rate of substitution than Bundle E. 
D) maximizes total utility.

Quizplus · Accepted Answer

Bundle D is outside the budget constraint, indicating it is unattainable with the current budget, but it lies on a higher indifference curve than Bundle E, showing it is preferred if it were attainable.

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