Read the following statements - |
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. |
Assertion (A) is false but Reasoning (R) is true. |
The rational consumer's problem is to move to a point on the HIGHEST possible indifference curve given her budget set to increase the level of satisfaction of the individual. The optimum point would be located on the budget line. The consumer is said to be in equilibrium where the IC is tangent to the budget line. |