Billy is maximizing utility subject to his limited income. As a result, which of
ID: 1093683 • Letter: B
Question
Billy is maximizing utility subject to his limited income. As a result, which of the following statements is TRUE?
The slope of the indifference curve is twice the slope of the budget constraint.
The MRSXY = PXPY.
The indifference curve intersects the budget constraint at precisely two points.
The budget constraint is tangent to the indifference curve.
A.The slope of the indifference curve is twice the slope of the budget constraint.
B.The MRSXY = PXPY.
C.The indifference curve intersects the budget constraint at precisely two points.
D.The budget constraint is tangent to the indifference curve.
Explanation / Answer
A.
The slope of the indifference curve is twice the slope of the budget constraint.
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