A consumer's budget constraint is determined by
A) The consumer's income
B) The consumer's income and preferences
C) The consumer's income and the prices of the goods they buy
D) The consumer's preferences and the prices of the goods they buy

Question

Quizplus · Accepted Answer

A consumer's budget constraint is determined by the consumer's income and the prices of the goods they buy. This constraint outlines the combination of goods and services the consumer can afford given their income level and the prices of those goods and services. Preferences affect choices within the budget constraint but do not determine the constraint itself.

A Consumer's Budget Constraint Is Determined by