What's the point where the budget line and indifference curve meet stands for?

Question

What does it indicates?thz

Answer 1

In the general case:

The budget line shows the combinations of goods and services you can afford to buy given your income and the prices of goods.

The indifference curve shows the combinations of goods and services that you are indifferent to having: you trade of some of one good for some of the other, and that leaves you equally satisfied.

Your aim is to reach the highest possible indifference curve, given your budget constraint. (The higher the indifference curve, the more of stuff you have, and the higher your satisfaction).

The point where the budget line just touches the indifference curve (technically the BL is tangential to the IC) shows you the combination of the goods and services you an afford that gives you the highest satisfaction.

If the budget line cuts the indifference curve, then it means you could get higher satisfaction by changing your combination of goods and services purchased to move to a place where th BL is just tangential to the IC.

Answer 2

It is the "equilibrium", where a person is maximising tehir welfare by being on their highest indifference curve, subject to also meeting their budget constraint.
They may be off this point at any given point in time, but are either not fully utilising or exceding their budget or not maximising their utility and so will move toward the equilibrium.

Answer 3

bliss