Question : Assertion: Consumer equilibrium can occur at multiple points of tangency between the budget line and indifference curves.
Reason: The consumer can achieve the same level of utility by choosing different combinations of goods that are equally preferable.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct option is (a) Option A Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Consumer equilibrium can occur at multiple points of tangency between the budget line and indifference curves. This is because the consumer can achieve the same level of utility by choosing different combinations of goods that are equally preferable, as long as they are on the same indifference curve.
When the budget line is tangent to an indifference curve, it represents a point of consumer equilibrium where the consumer maximizes their utility given their budget constraint. However, there can be multiple points where this tangency occurs, as long as they provide the same level of utility.
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