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JAMB Economics 1999 Question 12

Question 12

Theory of Consumer Behaviour

In the diagram above, the consumer attains equilibrium at point

Diagram for this question
  1. A.G
  2. B.H
  3. C.J
  4. D.K.
Show the answer and explanation

Answer: D (K.)

Explanation

A consumer is in equilibrium where the budget line just touches (is tangent to) the highest indifference curve he can reach; this is point K. J is beyond the budget line and H is where a lower curve crosses it.