A budget constraint:
A)represents the bundles of consumption that makes a consumer equally happy
B)shows the consumption bundles that a consumer can afford
C)reflects the desire by consumers to increase their income
D)shows the prices that a consumer chooses to pay for products he consumes

Question

Quizplus · Accepted Answer

A budget constraint shows the consumption bundles a consumer can afford given their income and the prices of goods and services. It does not represent the consumer's preferences or desire to increase their income, nor does it show prices chosen by the consumer.

A Budget Constraint