The consumer's desire is to obtain
the most enjoyment possible given her income and the prices she
faces. The highest indifference curve she can reach is the red one, which her
budget only touches at one point. This means that (M*,D*) is the best bundle she can afford; this is her utility maximizing
bundle. No other affordable combination of movies and dining out will yield more satisfaction.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved