Points along a budget line represent the maximum combinations of two commodities that a consumer can afford.

Question

Quizplus · Accepted Answer

This is because the budget line shows all the possible combinations of two goods that a consumer can purchase given their income and the prices of the goods. Any point on the budget line represents the maximum amount of one good that can be purchased given the chosen quantity of the other good.

Points Along a Budget Line Represent the Maximum Combinations of Two