A consumer's budget line shows
A)the utility that an individual would receive from consuming various combinations of two goods
B)the combinations of two goods that an individual is able to purchase,given prices and income
C)how income is influenced by prices of goods
D)how changes in income affect utility
E)the relationship between prices and income

Question

Quizplus · Accepted Answer

A consumer's budget line shows the combinations of two goods that an individual is able to purchase, given prices and income. It represents the limit of the consumer's purchasing power and helps to determine the affordable choices available to them. The budget line is typically downward sloping, as the price of one good increases, a consumer will be able to afford lesser amounts of that good or the other good, given their budget constraint.

A Consumer's Budget Line Shows