1 Budget Constraints Online Quiz Questions

Which description best defines a consumer's budget set?

A bundle on a budget line spends all available income, whereas an affordable bundle strictly inside the budget set may leave some income unspent.

A consumer has $\$20$, and coffee costs $\$4$ per cup. If the consumer buys no other goods, what is the maximum number of cups of coffee they can afford?

A consumer's income rises while the prices of both goods remain unchanged. Select all effects on the budget line.

A consumer has $\$20$, coffee costs $\$4$ per cup, and sandwiches cost $\$2$ each. How many sandwiches must the consumer give up to afford one additional cup of coffee while remaining on the budget line?

If every price and income increase by the same proportion, the consumer's budget set remains unchanged.

A budget line separates affordable bundles from bundles that exceed a consumer's income. Select all statements that follow from this definition.

A consumer has income $I = 30$, the price of good $x$ is $p_x = 3$, and the price of good $y$ is $p_y = 2$. If the consumer buys no $y$, what is the maximum quantity of $x$ they can afford?

Income and the price of good $y$ are unchanged, but the price of good $x$ rises. Which description correctly explains the resulting budget-line change?

Explain the difference between a budget set and a budget line, and describe why knowing a consumer's income and prices alone does not identify the consumer's eventual purchase.

A consumer has income $18$, with $p_x = 2$ and $p_y = 3$. Which equation describes the budget line?

Initially, a consumer has income $24$, with $p_x = 4$ and $p_y = 2$. Income and both prices then each rise by $25\%$. What is the maximum quantity of good $y$ the consumer can afford if they buy no $x$?

A consumer has income $I=24$, and the prices of goods $x$ and $y$ are $p_x=4$ and $p_y=3$. Which bundle $(x,y)$ is affordable?

A budget constraint identifies the bundles a consumer can afford, but it does not by itself identify which affordable bundle the consumer prefers.

A consumer’s income increases while both goods’ prices remain fixed. How does the budget line change?

If $p_x=5$ and $p_y=2$, what does the slope of the budget line imply about the trade-off for one additional unit of $x$?

A consumer has income $I=42$, and good $x$ costs $p_x=7$ per unit. What is the maximum quantity of $x$ the consumer can buy if they buy no other goods?

Income is $24$, $p_x=6$, and $p_y$ rises from $2$ to $4$. How does the budget line change?