Lily is a college student who likes to buy only two goods: Cheetos and Pepsi. To determine Lily's budget line, you need to know I. Lily's preferences for Cheetos and Pepsi.
II) The prices of Cheetos and Pepsi.
III) Lily's income.
A) II only
B) I and II
C) II and III
D) I, II and III

Question

Quizplus · Accepted Answer

To determine a budget line, you need to know the prices of the goods and the consumer's income. Preferences are not needed for the budget line.

Lily Is a College Student Who Likes to Buy Only