Suppose That a Consumer Purchases Just Two Goods, X and Y

question 96

Multiple Choice

Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the budget line in this case would indicate the:

• A) Maximum dollar amount of budget that the consumers has for good Y
• B) Price that the consumer has to pay for each unit of good Y
• C) Maximum quantity of good Y that the consumer could buy with a given budget
• D) Quantity of good Y that the consumer would want to buy

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Definitions:

Financial Capital

Economic resources measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services.

Law Of Supply

The principle that, all else equal, an increase in the price of goods will lead to an increase in the quantity supplied.

Good

An item or service that satisfies human wants and provides utility, which can be transferred or sold.

Sellers

Individuals or entities that offer goods or services in exchange for monetary or other forms of compensation.