A Consumer Will Achieve the Highest Level of Utility Possible

question 166

Multiple Choice

A consumer will achieve the highest level of utility possible when she consumes

• A) at the point at which the highest indifference curve is tangent to the budget constraint.
• B) at the point at which the indifference curve crosses the budget constraint.
• C) at a point to the left of the budget constraint.
• D) just below the point where the indifference curve crosses the budget constraint.

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Definitions:

Consideration

The benefit which is bargained for between the parties and is the essential reason for a party entering into a contract.

Bargained-For Exchange

A fundamental principle in contract law where both parties must exchange something of value for a contract to be considered valid and enforceable.

Genuine Assent

The agreement to enter into a contract based on a clear understanding of its terms, without any duress, fraud, or undue influence.

Undue Influence

An improper or wrongful pressure exerted on a person, resulting in the person acting against their free will or in a manner not reflective of their intent.