A line that shows the combinations of two goods that can be purchased with a given income is called a(n)
A)indifference curve
B)budget line
C)demand curve
D)supply curve
E)price floor

Question

Quizplus · Accepted Answer

The budget line shows the combinations of two goods that can be purchased with a given income, so it is the best choice. The indifference curve represents the different combinations of two goods that provide the same level of satisfaction, but it does not show the budget constraint. The demand curve shows the relationship between the price of a good and the quantity demanded, while the supply curve shows the relationship between the price of a good and the quantity supplied. The price floor is a government-imposed minimum price for a good or service. None of these other options accurately describe the line that shows the combinations of two goods that can be purchased with a given income.

A Line That Shows the Combinations of Two Goods That