contestada

The budget line shows 1. the amount of product A that a consumer is willing to give up to obtain one more unit of product B. 2. all possible combinations of two goods that can be purchased, given money income and the prices of the goods. 3. all equilibrium points on an indifference map. 4. all possible combinations of two goods that yield the same level of utility to the consumer.

Respuesta :

Answer:

Option (2) is correct.

Explanation:

The budget line is shows a various combination of two goods that a individual can afford with his given level of money income. It is also represent by a line on the graph.

Different individuals have different budget sets or we can say that bundles of goods that they can afford. Budget of the individuals is a good indicator for the producer because budget tells them about the demand for the goods. So, according to these demand constraints, the producers make their production decisions.