For a consumer, a budget line shows the boundary between
A) what is desired and what is not desired.
B) what is needed and what is not needed.
C) what is affordable and what is not affordable.
D) what is available and what is not available.

Question

Quizplus · Accepted Answer

A budget line shows the limit or boundary of what a consumer can afford to purchase given their income and the prices of goods and services. Therefore, it separates what is affordable (can be purchased within the budget) and what is not affordable (cannot be purchased within the budget). Option A and B are incorrect as the budget line doesn't necessarily reflect desires or needs, but rather affordability. Option D is incorrect as availability of goods and services is not necessarily reflected by the budget line.

For a Consumer, a Budget Line Shows the Boundary Between