In order to draw an individual's budget line, we must know
A) prices and preferences.
B) prices and income.
C) income and preferences.
D) prices, income, and preferences.

Question

Quizplus · Accepted Answer

The budget line is determined by the prices of goods and the individual's income, which together define the combinations of goods that can be purchased. Preferences are not needed to draw the budget line.

In Order to Draw an Individual's Budget Line, We Must