Which of the following statements is true?
A) A budget constraint remains the same for a consumer at all levels of income.
B) A budget constraint quantifies the trade-offs that economic agents face while making decisions.
C) A budget constraint is a function of the income of the consumer and not of the prices of the goods and services available for consumption.
D) A budget constraint is based on the minimum amount of money that an economic agent can spend on goods and services.

Question

Quizplus · Accepted Answer

A budget constraint represents the choices available to the consumer and quantifies the trade-offs between different goods and services that a consumer faces while making decisions. It shows the maximum amount a consumer can spend on different goods and services given their level of income and the prices of the goods and services available. Therefore, option B is the correct answer, while options A, C, and D are incorrect.

Which of the Following Statements Is True