Final answer:
A bundle of goods inside a consumer's budget constraint suggests that not all income is being spent (ii), and generally it will yield less utility than a bundle on the budget constraint (iii). Thus, the correct answer is 2) ii and iii only.
Step-by-step explanation:
The question is asking us to determine what a bundle of goods located inside a consumer's budget constraint implies. The key concepts here are the budget constraint itself and the utility derived from different bundles of goods in relation to this budget line. The budget constraint (or budget line) illustrates all the combinations of two goods that can be purchased with a given income, considering the prices of those goods.
Answering the student's question, any bundle that falls inside a budget constraint implies the consumer is not spending all of their income, since the budget line represents the maximum combination of goods that can be purchased with their income (option ii). Additionally, generally speaking, a bundle on the budget constraint is assumed to provide more utility than a bundle inside it because the constraint represents the most efficient allocation of the consumer's resources (option iii). This is under the assumption that more consumption gives more utility, which is a basic principle in standard economic theory.
By contrast, options i and iv are not correct. A bundle inside the budget constraint is not unobtainable (disqualifying option i) as it is within the means of the consumer. Option iv is also incorrect because a bundle outside of the budget constraint cannot be compared in terms of utility, as it's inaccessible with the current income and thus not relevant to the consumer's decision-making process.
Therefore, the correct response is 2) ii and iii only. A consumer achieving a bundle inside their budget line is not utilizing all their income, and they will typically achieve less utility with an interior bundle compared to a bundle on the budget constraint. Therefore, the correct response is 2) ii and iii only.