A consumer's budget constraint is determined by:
A) a consumer's income.
B) a consumer's income and preferences.
C) a consumer's income and the prices of the goods she buys.
D) a consumer's preferences and the prices of the goods she buys.

Question

Quizplus · Accepted Answer

A consumer's budget constraint is determined by their income and the prices of the goods they buy. Preferences play a role in determining what the consumer chooses to buy, but not in determining the budget constraint itself.

A Consumer's Budget Constraint Is Determined By