One individual's budget constraint:
A)will be the same as another individual's budget constraint if they have the same income.
B)will be the same as another individual's budget constraint if they have the same income and preferences.
C)will be the same as another individual's budget constraint if they have the same preferences.
D)can never be the same as another individual's budget constraint.

Question

Quizplus · Accepted Answer

Budget constraints are determined by income and prices of goods, not by preferences. Therefore, if two individuals have the same income and face the same prices, their budget constraints will be the same, regardless of their preferences.

One Individual's Budget Constraint