Practicing Success
Read the following statements - Assertion (A) and Reasoning (R): |
Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A). Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is not the correct explanation of Assertion (A). Assertion (A) is true but Reasoning (R) is false. Assertion (A) is false but Reasoning (R) is true. |
Both Assertion (A) and Reasoning (R) are true and Reasoning (R) is the correct explanation of Assertion (A). |
The budget set describes the bundles that are available to the consumer and an indifference map shows her preferences over the available bundles. A rational consumer is the one who takes such decisions which are best and give maximum satisfaction. So, from the bundles which are available, a rational consumer always chooses the one which gives her maximum satisfaction and this maximum satisfaction is provided by the highest possible indifference curve within the budget of consumer. Such indifference curve is tangent to the budget line. |