Based on Chapter 7 of Bowles and Halliday (2022), I explain how to find the utility-maximizing consumption bundle when considering two goods (x and y) and a money budget of $m to spend on the two goods at their corresponding prices p_x and p_y. I explain how the person does the best they can (maximizes their utility subject to the constraint) where the budget constraint is tangent to the highest feasible indifference curve such that the marginal rate of substitution (the person's willingness to pay) equals the marginal rate of transformation (the opportunity cost of the one good in terms of the other).

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