Exhibit 6A-4 Consumer Equilibrium

question 108

Multiple Choice

Exhibit 6A-4 Consumer equilibrium
​

Given the budget line and indifference curves shown in Exhibit 6A-4, point E is:

• A) inferior to point X.
• B) lowest attainable level of total utility.
• C) consumer equilibrium.
• D) unobtainable.

---

Definitions:

Deadweight Loss

Is a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.

Wine Producers

Businesses or individuals involved in the cultivation of grapes and the production and marketing of wine.

Tax Impact

The effect that taxation has on individual or corporate financial conditions.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in its price.