Which of the following statements about a budget constraint is true?
A)Each bundle gives an individual a different amount of utility and costs a different amount of money.
B)Each bundle gives an individual a different amount of utility, but costs the same amount of money.
C)Each bundle gives an individual the same amount of utility and costs the same amount of money.
D)Each bundle gives an individual the same amount of utility, but costs a different amount of money.

Question

Quizplus · Accepted Answer

A budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within his or her given income. Therefore, while each bundle on the budget constraint costs the same amount of money (the consumer's budget), each bundle can give a different amount of utility depending on the consumer's preferences.

Which of the Following Statements About a Budget Constraint Is