All points above the budget line are
A) inferior to every point on the budget line.
B) preferred to every point on the budget line.
C) unaffordable.
D) Both answers B and C are correct.

Question

Quizplus · Accepted Answer

All points above the budget line are unaffordable for the consumer as they require a higher level of income or a lower level of prices to be able to purchase them. Therefore, option C is the correct answer as it accurately describes the situation. Option A is incorrect as some points above the budget line can be preferred to some points on the budget line, depending on the consumer's preferences. Option B is also incorrect as points above the budget line are not necessarily preferred to every point on the budget line.

All Points Above the Budget Line Are