Question

How does a​ consumer's budget set differ from his budget​ constraint?A. A budget set refers to all of the possible bundles of goods and services a consumer can​ purchase, while a budget constraint is limited to the bundles he can purchase using all of his income.Your answer is correct.B. A budget constraint refers to all of the possible bundles of goods and services a consumer can​ purchase, while a budget set is limited to the bundles he can purchase using all of his income.C. A budget set is simply the collection of the many budget constraints a consumer faces at different points in time.D. There is no difference at alllong dash—the terms​ "set" and​ "constraint" are interchangeable.

Answer 1

A. A budget set refers to all of the possible bundles of goods and services a consumer can purchase, while a budget constraint is limited to the bundles he can purchase using all of his income.

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