A budget constraint defines the:
A)odds of earning a particular income.
B)consumer's preference ordering.
C)funds allocated for a particular purpose.
D)attainable consumption bundles.

Question

Quizplus · Accepted Answer

A budget constraint represents the limit of a consumer's feasible consumption bundles or combinations, given a fixed level of income and prices of goods. It defines the attainable consumption bundles, which are combinations of goods and services that a consumer can afford to purchase with a given income and prices. Therefore, the correct answer is D. The other options are incorrect because they do not reflect the meaning of a budget constraint properly.

A Budget Constraint Defines The