The budget line represents the set of all baskets in which the consumer purchases only one of the goods.

Question

Quizplus · Accepted Answer

The budget line represents the set of all baskets that a consumer can purchase given their income and the prices of both goods. It includes all possible combinations of both goods, not just baskets in which the consumer purchases only one of the goods. The budget line represents the set of all baskets that a consumer can purchase given their income and the prices of both goods. These baskets can include combinations of both goods, not just one good.

The Budget Line Represents the Set of All Baskets in Which