[amp_mcq option1=”Iso-utility curve” option2=”Production possibility line” option3=”Isoquant” option4=”Consumption possibility line” correct=”option4″]
The correct answer is: D. Consumption possibility line.
A budget line is a line that shows the combinations of goods and services that a consumer can afford to buy with a given amount of income and given prices of the goods and services. It is also known as the consumption possibility line.
An iso-utility curve is a curve that shows all the combinations of goods and services that give a consumer the same level of satisfaction or utility.
A production possibility line is a curve that shows all the combinations of goods and services that can be produced with a given amount of resources and given technology.
An isoquant is a curve that shows all the combinations of inputs that can produce a given level of output.
In conclusion, the budget line is also known as the consumption possibility line. It is a line that shows the combinations of goods and services that a consumer can afford to buy with a given amount of income and given prices of the goods and services.