A budget line
A) represents combinations of goods a consumer desires.
B) marks the boundary between what a consumer can afford and cannot afford.
C) has a positive slope.
D) is the same as the production possibilities frontier.
E) is the same as a demand curve.

Question

Quizplus · Accepted Answer

A budget line shows the different combinations of two goods that a consumer can afford given their income and the prices of the goods. Therefore, it marks the boundary between what a consumer can afford and cannot afford. The slope of the budget line is negative, not positive. A production possibilities frontier represents the different combinations of two goods that a society can produce given its resources, whereas a demand curve shows the different quantities of a good or service that consumers are willing and able to buy at different prices.

A Budget Line