Question

What do the points below the budget line represent?

• A. Bundle that cost less than consumer income
• B. Bundle that cost equal to consumer income
• C. Income which is less than the consumer bundle
• D. None of the above

Answer 1

The correct option is A Bundle that cost less than consumer income

The Budget line indicates the combination of goods a consumer can purchase given his or her income and the prices in the market.

Any bundle above the budget line cannot be achieved as it cost more than the consumers income.

However a bundle below the budget line cost less than the consumers income.