In a budget line/indifference curve figure, how do you identify ...

[kellyjaisingh]

In a budget line/indifference curve figure, how do you identify the best affordable combination of any two goods?
 
  What will be an ideal response?

Question 2

The above figure shows the marginal benefits and marginal costs of a college education. The efficient number of students is
 
  A) 0.
  B) 10 million.
  C) 15 million.
  D) 25 million.

[mrphibs]

Answer to Question 1

Any combination of goods along the budget line is affordable. The best of these combinations is on the highest indifference curve. This best combination is where the indifference curve is tangent to the budget line, so this combination is the best affordable combination.

Answer to Question 2

C

[kellyjaisingh]

Gracias!

[miss_1456@hotmail.com]

Wow, this really help