A consumer's budget set is

only the bundles that cost exactly his incomeCorrect answerYour answerall the bundles he can buy with his income at the given pricesCorrect answerYour answerall the bundles he likes equallyCorrect answerYour answerthe bundles the government allows him to buyCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer B

Correct answer: B

The budget set is every bundle with P₁x₁ + P₂x₂ ≤ M: on or inside the budget line.
Bundles costing exactly M form the budget line, a part of the set.

Worth noting

Bundles liked equally lie on an indifference curve, a different idea.

Concept: Budget set
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsBudget set and budget line

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Ten questions from Budget Line & Optimal Choice, at your own pace.

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A consumer's budget set is

Explanation