Figure 3B

-Which of the following is the lump- sum budget line in Figure 3B?
A)AH
B)BF
C)IJ
D)AG

Question

Figure 3B

-Which of the following is the lump- sum budget line in Figure 3B?
A)AH 
B)BF 
C)IJ 
D)AG

Quizplus · Accepted Answer

The lump-sum budget line is a straight line that represents all combinations of two goods that a consumer can afford with a fixed budget. In Figure 3B, BF is the correct choice because it is the only option that represents a straight line, indicating a constant trade-off between two goods, which is characteristic of a lump-sum budget constraint.

Figure 3B -Which of the Following Is the Lump- Sum Budget Line