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

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Definitions:

Payments

The action or process of paying someone or something, typically involving transferring money in exchange for goods or services.

Big Bank

A colloquial term often used to describe very large multinational banking and financial services corporations.

Capital Contribution

The act of injecting financial resources or assets into a company or partnership by its owners or partners.

Partnership Agreement

A contractual document among partners that outlines the terms, conditions, and operational procedures of a partnership business.