An affordable consumption bundle is an interior choice if:
A) it lies below the budget line.
B) for each good, there are affordable bundles containing a little bit more of that good and a little bit less of it.
C) for each good, there are no other affordable bundles containing a little bit more of that good and a little bit less of it.
D) it exhausts the consumer's income.

Question

Quizplus · Accepted Answer

An interior choice refers to a consumption bundle where, for each good in the bundle, the consumer can afford to buy a little bit more or a little bit less of that good while still remaining within their budget. This means there are affordable options both above and below the current consumption level for each good, indicating flexibility in the choice without exceeding the budget. Choices that lie strictly on the budget line, exhaust the consumer's income, or have no flexibility for more or less of a good do not fit this definition.

An Affordable Consumption Bundle Is an Interior Choice If