A budget line shows the
A) quantities of goods a buyer can purchase with given income and prices.
B) relationship between price and quantity demanded.
C) total utility a consumer realizes from consuming different quantities of a good.
D) quantities of consumption that maximizes marginal utility.
E) the prices of the two goods a buyer can purchase.

Question

Quizplus · Accepted Answer

A budget line shows the combination of quantities of two goods that a buyer can purchase with a given level of income and the prevailing prices of the goods. It represents the limits of the consumer's choices in terms of the combinations of goods that are affordable given their income and the prices they face.

A Budget Line Shows the