Optimality and the Tangency Condition
Imagine a consumer is choosing between two goods. Their budget constraint and one of their indifference curves are drawn on a graph. Explain in detail why the consumer is not at their optimal consumption point if their indifference curve crosses (intersects) their budget constraint at two distinct points. In your explanation, describe how this consumer could achieve a higher level of satisfaction without changing their total spending.
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Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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Figure 3.7a - Diagram of Karim's Optimal Choice at a €30 Wage
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