The feature that leads to there only being one tangency point between the indifference curve and the efficient set is the
A) efficient set is convex.
B) indifference curve has a negative slope.
C) efficient set has only N feasible choices.
D) efficient set is concave.

Question

Quizplus · Accepted Answer

When the efficient set is concave, there will be only one tangency point between the indifference curve and the efficient set. If the efficient set were convex, there could be multiple tangency points. The slope of the indifference curve being negative is a necessary condition for a tangency point, but it alone does not lead to only one tangency point. Likewise, the number of feasible choices on the efficient set does not affect the tangency point.

The Feature That Leads to There Only Being One Tangency