A consumer's budget line shows
a. the utility that an individual would receive from consuming various combinations of two goods
b. the combinations of two goods that an individual is able to purchase, given prices and income
c. how income is influenced by prices of goods
d. how changes in income affect utility
e. the relationship between prices and income
B
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Asymmetric information before a transaction takes place generates the problem of
A) moral hazard. B) adverse selection. C) bank runs. D) irrational behavior.
Refer to the above figure. Assume that B is the current long-run aggregate supply (LRAS) curve and that E is the current short-run aggregate supply (SRAS) curve
If a new discovery of large oil fields in Florida led to an increase in the nation's productive capacities, then we could expect the LRAS curve and the SRAS curve to A) remain B and E. B) move to A and D. C) move to C and F. D) move to A and F.