In the context of consumer theory, the budget line represents:
A. Combinations of inputs that give the same output
B. Combinations of goods that give the same utility
C. Combinations of goods that can be purchased with a given income and prices
D. Combinations of prices that maximise profit
Answer: Option C
Solution (By JKSSB Mock Tests)
The budget line shows all possible combinations of two goods that a consumer can afford given his money income and the prices of the goods.
No comments yet. Be the first to start the discussion!