Which of the following statements is true?
A) The price effect is shown by moving up or down a fixed budget line.
B) To determine a consumer's best affordable point, we need only the budget line or the indifference curve.
C) Every point on a budget line lies on an indifference curve.
D) Both A and B are true.

Question

Quizplus · Accepted Answer

Every point on a budget line represents a combination of goods that a consumer can afford given their budget and the prices of goods, and each of these points can be associated with a level of utility for the consumer, represented by an indifference curve. Thus, every point on a budget line lies on some indifference curve, reflecting different combinations of goods that provide the consumer with the same level of satisfaction.

Which of the Following Statements Is True