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 the other good
C) For each good, there are no other affordable bundles containing a little bit more of that good and a little bit less of the other good
D) It exhausts the consumer's income

Question

Quizplus · Accepted Answer

An interior choice is one where the consumer can still afford to consume a little bit more of one good and a little bit less of the other good while staying within their budget constraint. Option B accurately describes this scenario as it states that there are affordable bundles with slightly more or less of both goods. Options A and D do not necessarily describe an interior choice, while option C describes a situation where the consumer cannot make any other affordable choices, which is not true for an interior choice.

An Affordable Consumption Bundle Is an Interior Choice If