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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

Correct Answer:

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