Economics (AS & A Level) · Oct / Nov 2022 · Paper 32 · Question 5
9708Indifference curves and budget lines
Which statement about a budget line in consumer behaviour theory is correct?
- AIt illustrates consumer preference between two goods.
- BIt illustrates combinations of two goods that consumers are able to purchase with a given income.
- CIt illustrates the least cost combination of goods that yield the same level of utility.
- DIt illustrates the income effect of a price change.
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Correct answer: B. It illustrates combinations of two goods that consumers are able to purchase with a given income.
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