Which of the following statements is correct?
A) A budget line changes ONLY IF the person's budget changes.
B) Rich consumers are unaffected by prices.
C) Consumers have the ability to buy everything they desire.
D) A consumer's budget line shows the limits to what a consumer can buy.
E) A consumer's budget line shows the goods with the highest marginal utilities.

Question

Quizplus · Accepted Answer

A consumer's budget line shows the maximum amount of goods or services that they can purchase given their income and the prices of the goods. It represents the limit of what a consumer can buy. Therefore, statement D is the only correct statement. The other statements are false.

Which of the Following Statements Is Correct