The budget line
A) represents the set of all baskets the consumer can afford.
B) represents the set of all baskets the consumer can afford while spending all available income.
C) represents the set of all baskets that give the consumer the same level of utility while holding spending constant.
D) represents the set of all baskets in which the consumer purchases only one of the goods.

Question

Quizplus · Accepted Answer

The budget line represents the set of all baskets the consumer can afford while spending all available income. It shows the various combinations of two goods that can be purchased with a given amount of income at prevailing market prices.

The Budget Line