Question

The endpoints (horizontal and vertical intercepts) of the budget line: A) measure the rate at which a consumer is willing to trade one good for another. B) represent the quantity of each good that could be purchased if all of the budget were allocated to that good. C) measure its slope. D) measure the rate at which one good can be substituted for another. E) indicate the highest level of satisfaction the consumer can achieve.

Answer 1

The correct answer is letter "B": represent the quantity of each good that could be purchased if all of the budget were allocated to that good.

Step-by-step explanation:

The budget line portraits in a graphic the combinations of two products consumers can pay for with their income at a specific level of price. According to this approach, consumers will give up on one product to acquire more of the other good. In the graphic, the endpoint of the vertical and horizontal axis represents the maximum quantity of the good that can be acquired by the consumers if all their income goes towards it.