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  • Determining the Optimal Choice via the Graphical (Tangency) Method

The Tangency Condition for Utility Maximization

In a constrained choice model, an individual's utility is maximized at the point of tangency between their indifference curve and the feasible frontier. This specific point is optimal because it represents a combination of goods on the highest possible indifference curve that is still affordable or achievable. At the point of tangency, the indifference curve and the feasible frontier touch but do not intersect.

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Introduction to Microeconomics Course

The Economy 2.0 Microeconomics @ CORE Econ

Ch.3 Doing the best you can: Scarcity, wellbeing, and working hours - The Economy 2.0 Microeconomics @ CORE Econ

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