A budget line identifies combinations of two goods that a consumer
A)will purchase if the prices are low enough.
B)will purchase, given his or her preferences.
C)wants to purchase.
D)is able to purchase, given his or her income and prices.
E)has purchased, given his or her income and prices.

Question

Quizplus · Accepted Answer

A budget line represents the combinations of two goods that a consumer is able to purchase, given his or her income and the prices of the goods. Therefore, choice D is the correct answer. Choices A, B, C, and E are incorrect because they do not accurately describe the purpose or function of a budget line.

A Budget Line Identifies Combinations of Two Goods That a Consumer