A person's consumption possibilities include all points on their budget line as well as all points below the budget line.

Question

Quizplus · Accepted Answer

This statement is true. All points on the budget line represent the maximum amount of goods and services a person can consume given their income and the prices of the goods and services. The points below the budget line represent combinations of goods and services that are within a person's budget but do not exhaust all of their income.

A Person's Consumption Possibilities Include All Points on Their Budget