Question

The possible combinations of two goods which a consumer can purchase with a given money income is shown by:

A.
a budget line.
B.
a production possibilities curve.
C.
a demand curve.
D.
consumer expenditure line.

Answer 1

A budget line shows the possible combinations of two goods that are affordable given a consumer's limited income.

Step-by-step explanation:

A budget line shows the possible combinations of two goods that are affordable given a consumer's limited income. It represents the different combinations of goods that a consumer can purchase with a given budget. For example, if a consumer has $100 to spend and apples cost $2 each and oranges cost $1 each, the budget line would show that the consumer can afford to buy 50 apples or 100 oranges or any combination in between.