When the Budget Line Is Just Tangent to the Highest

question 131

Multiple Choice

When the budget line is just tangent to the highest achievable indifference curve,then _____.

• A)the consumer is in equilibrium
• B)the consumer should purchase more of good X
• C)the consumer should purchase more of good Y
• D)the consumer cannot afford the combination represented by the tangency point
• E)the consumer should purchase less of both goods

---

Definitions:

Transactions

Financial events that involve an exchange of value between two parties, affecting the accounting equation.

Tax Planning

The process of analyzing one's financial situation or plan to ensure tax efficiency, with the aim of minimizing tax liability and maximizing compliance.

Market Research

The process of gathering, analyzing, and interpreting information about a market, including potential customers and competitors, to inform business decisions.

Auditing

The process of examining an organization's financial records to ensure accuracy and compliance with accounting standards and regulations.