A budget line graphically illustrates: a) The possible prices of goods, b) The amount of one good...
Question:
A budget line graphically illustrates:
a) The possible prices of goods,
b) The amount of one good that can be purchased with a given income, given the price of that good,
c) The possible combinations of two goods that can be purchased with a given income, given the prices of both goods,
d) The possible levels of income.
Budget Line
Budget line is a graphical representation of a budget constraint which shows the various combinations of two goods that a consumer could afford with a given budget and prices.
Answer and Explanation: 1
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The correct option is C: The possible combinations of two goods that can be purchased with a given income, given the prices of both goods.
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Budget Constraints: Definition & Formula
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Chapter 1 / Lesson 6
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Learn what budget constraint is and view examples. Understand how to use the budget constraint formula and how to represent a budget constraint using a graph.
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