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Figure 4.18 The Consumer’s Optimal Choice
The consumer’s optimal consumption bundle occurs at the point of tangency between her budget constraint and her indifference curve, shown here at point A. The consumer can afford the consumption bundles represented by points B, C, and D, but these are on a lower indifference curve (U1) than is point A (U2). Point E is on a higher indifference curve (U3), but it lies outside the consumer’s budget constraint and is thus infeasible.