Within the framework of indifference curve analysis, what prevents the individual from purchasing more of all goods?
A)Legal prohibitions
B)Budget constraint
C)The slope of the indifference curve
D)Psychological considerations
E)Diminishing marginal utility

Question

Quizplus · Accepted Answer

The budget constraint is what limits an individual's ability to purchase more of all goods. It represents the combination of prices and income that restricts the individual's purchasing power. Choosing to purchase more of one good requires giving up the opportunity to purchase more of other goods, which is reflected in the budget constraint. Legal prohibitions, the slope of the indifference curve, psychological considerations, and diminishing marginal utility may all influence an individual's consumption decisions, but they do not directly restrict the individual's ability to purchase more of all goods.

Within the Framework of Indifference Curve Analysis, What Prevents the Individual