Indifference Curves and Utility Analysis Are Both Methods of Examining

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The Answer is A new budget constraint line has the same slope as the original budget constraint line, but it does not allow the consumer to purchase the original bundle. The new budget line shifts the budget constraint so that the consumer is able to afford a bundle of goods of equal utility-but not necessarily the same bundle. At optimal consumption, the marginal rate of substitution equals the slope of the budget constraint line, which is the price ratio. Thus, optimal consumption can be found by using either the indifference curve approach or marginal utility analysis.

Indifference Curves and Utility Analysis Are Both Methods of Examining

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