GENERAL KNOWLEDGE

Detailed explanation-1: -The consumer is in equilibrium at a point where the budget line is tangent to an indifference curve, because it can not intersect the IC either from above or below.

Detailed explanation-2: -A budget line shows combinations of two goods a consumer is able to consume, given a budget constraint. An indifference curve shows combinations of two goods that yield equal satisfaction. To maximize utility, a consumer chooses a combination of two goods at which an indifference curve is tangent to the budget line.

Detailed explanation-3: -Consumer equilibrium is reached at the point of tangency between the budget line and the highest-attainable indifference curve.