When a Consumer's Marginal Rate of Substitution Between X and Y

question 93

Multiple Choice

When a consumer's marginal rate of substitution between X and Y is equal to the ratio of prices for X and Y, and when the consumer is spending all available income, then

• A) a higher indifference curve can be reached given the existing budget line.
• B) all budget lines are tangent to all indifference curves.
• C) the consumer is not maximizing his utility.
• D) the budget line is tangent to the indifference curve at all quantities of X and Y.
• E) the budget line is tangent to the indifference curve.

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Definitions:

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The original constitution of the United States, ratified in 1781, which was replaced by the U.S. Constitution in 1789 due to its inability to provide a strong central government.

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