Question

Budget set includes ______.

Options

• All those combinations of two goods which a consumer already possesses

• All those combinations of two goods which a consumer cannot afford

• All those combinations of two goods which a consumer is willing to buy

• All those combinations of two goods which a consumer can afford

Answer 1

Budget set includes all those combinations of two goods which a consumer can afford.

Explanation:

The budget set includes every combination the consumer can afford at given income and prices. It includes bundles costing less than or equal to income.