Question

Any combination of goods lying outside of the budget line

A.implies that the consumer is not spending all of the consumer's income.
B.yields less utility than any point on the budget line.
C.yields less utility than any point inside the budget line.
D. is unattainable, given the consumer's income.

Answer 1

Any combination of goods lying outside of the budget constraint is unattainable given the consumer's income, which means the correct answer is D.

Step-by-step explanation:

The question pertains to a concept in microeconomics called the budget constraint (or budget line), which is a graphical representation of all the combinations of two goods that a consumer can afford given their income and the prices of the goods. Points on the budget line represent combinations of goods that exactly use up the consumer's income. The answer to the student's question is D. is unattainable, given the consumer's income. This is because any point outside the budget line represents a combination of goods that cost more than the consumer's income, hence such combinations are not within the consumer's budget set. It's also worth noting that points on the budget line can potentially provide higher utility than points inside the budget line, depending on the consumer's indifference curves.