A budget line
A)shows all the combinations of goods that yield the same utility.
B)shows all the combinations of goods that require the same total expenditure.
C)has a slope that depends on consumers' income.
D)usually slopes upward.

Question

Quizplus · Accepted Answer

A budget line shows all the combinations of goods that require the same total expenditure. It illustrates the different combinations of two goods that a consumer can afford given a certain income and the prices of the goods. The budget line is a straight line, and its slope depends on the relative prices of the two goods.

A Budget Line