When the Consumer Has Found the Best Affordable Bundle of Goods

question 60

Multiple Choice

When the consumer has found the best affordable bundle of goods:

• A) the area above the indifference curve that runs through the consumer's best bundle does not overlap with the area below the budget line.
• B) the area above the indifference curve that runs through the consumer's best bundle does not overlap with the area above the budget line.
• C) the area above the indifference curve that runs through the consumer's best bundle should overlap with the area below the budget line.
• D) the area above the indifference curve that runs through any bundle other than the consumer's best bundle does not overlap with the area below the budget line.

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Definitions:

Economic System

A particular set of institutional arrangements and a coordinating mechanism for solving the economizing problem; a method of organizing an economy, of which the market system and the command system are the two general types.

Institutional Arrangements

The set of policies, norms, and regulations that shape the behavior of individuals and organizations within a society.

Economizing Problem

The choices necessitated because society’s economic wants for goods and services are unlimited but the resources available to satisfy these wants are limited (scarce).

Property Rights

Legal rights to possess, use, and dispose of assets including real estate, personal property, or intellectual property.