The points located at the intersection of the budget line with the y axis means: a) these are points impossible to reach by the consumer b) the consumer spends absolutely nothing c) the consumer spends all his income for only one good d) the consumer does not spend all his income

The points located at the intersection of the budget line with the y axis means: a) these are points impossible to reach by the consumer b) the consumer spends absolutely nothing c) the consumer spends all his income for only one good d) the consumer does not spend all his income

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section21.1: The Budget Constraint: What The Consumer Can Afford

Problem 1QQ

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Equilibrium Price and Quantity

Equilibrium refers to a state of balance that comes about because there is equality in all forces.

Question

The points located at the intersection of the budget line with the y axis means:

a) these are points impossible to reach by the consumer

b) the consumer spends absolutely nothing

c) the consumer spends all his income for only one good

d) the consumer does not spend all his income

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Step 1: Define budget line

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Step 2: Determine the correct option

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Step 3: Explain why other options are incorrect

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