Any consumption point that is on the budget line
A)implies the household is paying above- market prices for the goods in question.
B)implies the household is paying below- market prices for the goods in question.
C)implies that the household is not spending all of its income on the goods in question.
D)indicates consumption spending beyond current income.
E)implies that the household is spending all of its income on the goods in question.

Question

Quizplus · Accepted Answer

A consumption point on the budget line indicates that the household is spending all of its income on the goods in question, as the budget line represents the maximum combination of goods that can be purchased with the given income and prices.

Any Consumption Point That Is on the Budget Line