Choices B and G are both on the opportunity set. However, choice G of six books and 48 doughnuts is on lower

indifference curve Ul than choice B of three books and 84 doughnuts, which is on the indifference curve Um. If

Lilly were to start at choice G, and then thought about whether the marginal utility she was deriving from

doughnuts and books, she would decide that some additional doughnuts and fewer books would make her

happier—which would cause her to move toward her preferred choice B. Given the combination of Lilly’s

personal preferences, as identified by her indifference curves, and Lilly’s opportunity set, which is determined

by prices and income, B will be her utility-maximizing choice.

The highest achievable indifference curve touches the opportunity set at a single point of tangency. Since an
infinite number of indifference curves exist, even if only a few of them are drawn on any given diagram, there
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