Use the following to answer questions:
Figure: Leisure 3
-(Figure: Leisure 3) Refer to the figure. In this diagram, the budget constraint with welfare is:
A) ABC.
B) BD.
C) DC.
D) ABD.

Question

Use the following to answer questions:
Figure: Leisure 3 
-(Figure: Leisure 3) Refer to the figure. In this diagram, the budget constraint with welfare is:
A) ABC. 
B) BD. 
C) DC. 
D) ABD.

Quizplus · Accepted Answer

The best choice for the individual is at point B, where the indifference curve is tangent to the budget constraint. At this point, the individual maximizes their utility given their budget constraint. Point D is outside the budget constraint and thus not feasible, while points A and C are on the budget constraint but do not provide the highest level of utility. Therefore, the best choice is at point B, which is part of option D, ABD.

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