Asked by Alyssa Everett on Jul 16, 2024
Verified
The consumer will select that point on the budget line which puts him or her on the highest attainable indifference curve.
Budget Line
A visual depiction that shows all the different combinations of two products that can be bought within a specified budget, based on their current prices.
Highest Attainable
Refers to the best or most favorable outcome or state that can be achieved within given constraints.
- Fathom how the optimal selection of goods subject to budgetary limitations contributes to maximizing utility.
Verified Answer
TZ
Tracy ZhangJul 21, 2024
Final Answer :
True
Explanation :
This is because the point where the budget line is tangent to the highest attainable indifference curve represents the combination of goods that maximizes the consumer's utility given their budget constraint.
Learning Objectives
- Fathom how the optimal selection of goods subject to budgetary limitations contributes to maximizing utility.