A consumer who doesn't spend all of her income
A)would be at a point outside of her budget constraint.
B)would be at a point inside her budget constraint.
C)must not be consuming positive quantities of all goods.
D)must be consuming at a point where her budget constraint touches one of the axes.

Question

Quizplus · Accepted Answer

If a consumer doesn't spend all of their income, it means they are consuming less than what they can afford according to their budget constraint. Thus, they must be at a point inside their budget constraint. Option A is incorrect because spending less than their income does not necessarily mean they are outside their budget constraint. Option C is incorrect because there is no information provided regarding positive consumption of goods. Option D is incorrect because a consumer could potentially be consuming at any point inside the budget constraint.

A Consumer Who Doesn't Spend All of Her Income