The Tangency of an Indifference Curve and a Budget Line

question 27

Multiple Choice

The tangency of an indifference curve and a budget line:

• A) gives the profit maximizing combination of two goods
• B) gives the cost minimizing combination of two goods
• C) can be determined without regard to the prices of the two goods
• D) is found where the slope of the indifference curve (MRS) is equal to the price ratio

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