Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
-Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income.
B) available, but at which he does not spend all his income.
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income.
D) in his opportunity set but not on his budget constraint.

Question

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.  Figure 6.1
-Refer to Figure 6.1. AC represents Tom's budget constraint. Point D then represents a point that is
A) an available option, as Tom is just spending all of his income. 
B) available, but at which he does not spend all his income. 
C) not available because it represents a combination of hamburgers and hot dogs that he cannot purchase with his income. 
D) in his opportunity set but not on his budget constraint.

Quizplus · Accepted Answer

Point D is not available because it lies beyond the budget constraint AC, indicating a combination of goods that exceeds Tom's income.

Refer to the Information Provided in Figure 6