A Consumer Is in Equilibrium When the

question 19

Multiple Choice

A consumer is in equilibrium when the

• A) consumer is buying any combination of goods and services on his or her budget line.
• B) consumer is buying the combination of goods and services on the budget line and on the highest attainable indifference curve.
• C) marginal rate of substitution is as small as possible.
• D) marginal rate of substitution is as large as possible.
• E) marginal rate of substitution exceeds the relative price of the two goods by as much as possible.