The budget constraint shows that
A) the consumer faces a trade-off in the consumption of goods.
B) the consumer can have as many goods as he wants.
C) as consumers spend more on one good, they spend more on others.
D) total income equals total spending on one good.

Question

Quizplus · Accepted Answer

The budget constraint shows the different combinations of goods a consumer can afford with their income. This means that the consumer faces a trade-off in the consumption of goods, as they cannot have unlimited quantities of both goods. Therefore, the best choice is A.

The Budget Constraint Shows That