The Point Where an Indifference Curve Just Touches the Budget

question 172

Multiple Choice

The point where an indifference curve just touches the budget line at one point

• A) is the best affordable point.
• B) is where the marginal rate of substitution exceeds the relative price by as much as possible.
• C) is a point on the consumer's supply of spending curve.
• D) cannot be possible because indifference curves always cross the budget line at two points.
• E) None of the above answers is correct.