A budget line shows the
A) consumption possibilities for several sets of relative prices at a level of income.
B) complete set of preferences for a household at various incomes.
C) rate at which consumers wish to substitute one good for another.
D) consumption possibilities of a consumer at a given level of income and prices.

Question

Quizplus · Accepted Answer

A budget line represents the combination of goods and services a consumer can purchase given their income and the prices of those goods and services. It does not vary with relative prices or show preferences or substitution rates directly.

A Budget Line Shows the