A consumer's budget constraint for goods X and Y is determined by how much the consumer likes good X relative to good Y.

Question

Quizplus · Accepted Answer

A consumer's budget constraint is determined by the prices of goods X and Y and the consumer's income, not by their preferences for one good over another. Preferences influence how the budget is allocated, but the constraint itself is based on financial factors.

A Consumer's Budget Constraint for Goods X and Y Is