If a consumer does not have convex preferences, then a point of tangency between her indifference curve and her budget line must be an optimal consumption point.

Convex Preferences

A characteristic of consumer preference whereby a consumer prefers combinations or mixtures of goods over extreme amounts of single goods, displaying a preference for diversification.

Indifference Curve

A graph showing a combination of two goods that give a consumer equal satisfaction and utility, demonstrating the consumer's preference.

Optimal Consumption

The most efficient allocation of resources and consumption choices based on individual preferences, maximizing utility.