The Budget LineL

question 80

Multiple Choice

The budget lineL

• A)represents the set of all baskets the consumer can afford.
• B)represents the set of all baskets the consumer can afford while spending all available income.
• C)represents the set of all baskets that give the consumer the same level of utility while holding spending constant.
• D)represents the set of all baskets in which the consumer purchases only one of the goods.

---

Definitions:

Income Distribution

The way in which a nation's total earnings are divided among its population.

Marginal Revenue Product

The extra income created by using an additional unit of a production resource or input.

Price of Labor

The wages or compensation workers receive in exchange for their labor, determined by various factors including skill level, demand, and economic conditions.

Elasticity of Demand

The quantification of the relationship between a good's price and its demand levels.