In drawing a budget line it is assumed that:Multiple Choiceconsumer willingness to substitute between the two products is fixed.money income is fixed.consumer preferences are fixed.the prices of the two products are variable.

A consumer’s budget line depictsSelected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer.athe utility that an individual would receive from consuming various combinations of two goodsbthe combinations of goods that a person can afford at given prices and incomechow changes in income affect utility for given pricesdthe combinations of goods where marginal utility divided by price is the same for all goods

Which of the following scenarios is consistent with a consumer's optimal choice?The budget line intersects the indifference curve at multiple pointsThe budget line is tangent to the indifference curveThe budget line intersects the indifference curve at one pointThe budget line is above the indifference curve

Multiple Choice QuestionPrice is defined asMultiple choice question.the money or other considerations exchanged for the ownership or use of a product.any factor that determines consumers' willingness and ability to pay for products and services.the practice of exchanging products and services for other products or services.a judgment by a consumer of the worth and desirability of a product or service relative to substitutes.

When the _________, the quantity demanded changes, ceteris paribus.Multiple choice question.price of a good changesincome of consumers changestastes and preferences of consumers changeprice of substitute goods changes

Consider a consumer who can buy good 1 or 2. The price of good 1 is $5 and the price for good 2 is $4. The consumer has income of 60. She buys 12 units of good 2. The consumer wants to also purchase 2 units of good 1. Which statement is true?Group of answer choicesThis is feasible, as the consumer is inside her budget setThis is outside the consumer’s budget set – it is unaffordableThis is affordable – the consumer would be consuming on her budget constraintall of the abovenone of the above PreviousNext