5 Questions
What do consumption possibilities tell us?
What the consumer can afford to buy given a limited income and prices of goods and services
What is illustrated by the budget line?
The limit of consumption possibilities
How are affordable choices constrained by the budget line?
Points on the budget line and inside the budget line are affordable
What happens to consumption possibilities when there is an increase in income?
Shifts the budget line rightward without changing its slope
How does a change in the price of one of the goods affect consumption possibilities?
Changes the intercept on its axis and changes the slope of the budget line
Test your knowledge of consumer behavior in economics, including consumption possibilities, budget lines, and utility maximization. Explore how consumers make choices based on their preferences and limited income.
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