When the Indifference Curve Is Tangent to the Budget Constraint

question 158

Multiple Choice

When the indifference curve is tangent to the budget constraint,

• A)a consumer cannot be made better off without an increase in her income or a price decrease in one of the goods she consumes.
• B)the consumer is likely to be at a sub-optimal level of consumption.
• C)income is at its optimum for a consumer.
• D)indifference curves are likely to intersect.

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Definitions:

Common Cold

A viral infectious disease mainly affecting the nose and respiratory passages but can also affect the throat, characterized by sneezing, coughing, and a runny nose.

Influenza

A contagious respiratory illness caused by influenza viruses, leading to symptoms like fever, cough, and body aches.

Allergy

An immune system response to a foreign substance (allergen) that is not typically harmful to the body. This reaction can cause various symptoms, such as sneezing, itching, and swelling.

Itchy Eyes

A sensation that leads to the desire to rub the eyes, often caused by allergies, infections, or dryness.