If the Combination of Two Goods Occurs at a Point

question 140

Multiple Choice

If the combination of two goods occurs at a point of tangency between the budget line and an indifference curve:

• A) consumer equilibrium has not been achieved.
• B) all available income has been spent and total utility is maximized.
• C) total utility can be increased by consuming less of both goods.
• D) total utility can be decreased by consuming more of both goods.