Final answer:
An individual's ability to buy is indeed dependent on their buying power, which includes factors such as income, credit, and assets. High-income individuals enjoy more purchasing flexibility, while lower-income individuals face relative financial constraints.
Step-by-step explanation:
True, an individual's ability to buy does depend significantly on the amount of their buying power. A person's buying power is affected not only by their income level but also by their credit, assets, and the economic environment. Those with higher incomes or better credit can often secure loans with lower interest rates, purchase items in bulk to save on unit costs, and have more flexibility in making purchases.
Conversely, those with lower incomes may be constrained in their purchasing choices and face higher costs relative to their income, particularly for essential goods and services like housing and transportation. The income effect, especially relevant in economic discussions, refers to how changes in the price level affect the quantity of goods that can be purchased with a given amount of income, thereby influencing an individual's buying power.