Budget Constraints Exist for Consumers Because

question 526

Multiple Choice

Budget constraints exist for consumers because

• A)their utility from consuming goods eventually reaches a maximum level.
• B)even with unlimited incomes they have to pay for each good they consume.
• C)they have to pay for goods, and they have limited incomes.
• D)prices and incomes are inversely related.

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Definitions:

Price of Capital

The cost of using capital assets, which can include interest rates on loans used to purchase the assets or opportunity costs of investing capital elsewhere.

Demand for Labor

The total amount of labor that employers want to hire at varying wage rates in a given time period.

Related Resource

Resources that are connected or relevant to one another in such a way that the presence, absence, or alteration of one can affect the other.

Labor Demand

Labor demand is the quantity of workers that employers are willing and able to hire at a given wage rate, within a certain period.