Practice The Consumer’s Budget (2.2) - Theory of Consumer Behaviour

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10 questions

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6 sample questions

Question 1.
What is a budget set?
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Think about what your money can buy.
Question 2.
Describe the budget line.
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Consider what happens when you spend all your money.
3Question 3.
What does the budget line represent?
- All goods a consumer can afford
- Goods costing exactly the consumer's income
- The total income available to a consumer
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Think about what happens when you use all your money.
4Question 4.
True or False: Increasing the price of one good will always shift the budget line outward.
- True
- False
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What does higher prices mean for what you can afford?
Question 5.
If a consumer has $50 and spends $10 on mangoes, how much can they spend on bananas priced at $5?
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Subtract the spending and divide the remaining money by the price of bananas.
Question 6.
What happens to the consumer's budget constraint if income doubles but prices remain constant?
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Think about how more money correlates to more options!

6 more questions in this section. Enroll free to practise them all.