A consumer chooses an optimal consumption point where the
a. slope of the indifference curve exceeds the slope of the budget constraint by the greatest amount.
b. ratio of the marginal utilities equals the ratio of the prices.
c. marginal rate of substitution is maximized.
d. all of the above are correct.

Respuesta :

The definition of an optimal consumption point is when the consumer maximizes utility. It means when the ratio of marginal utility per dollar spent is equals to the ratio of prices of the goods and services in the consumption bundle. The consumption bundle is the collection of goods with specific amount for each good.

In a nutshell, a consumer chooses an optimal consumption point where the ratio of the marginal utilities equals the ratio of prices.

Ans: b
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