
Understanding Budget Lines

Interactive Video
•
Mathematics, Business
•
9th - 12th Grade
•
Hard

Aiden Montgomery
FREE Resource
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10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of a budget line in economic analysis?
To calculate the total expenditure on luxury goods
To determine the maximum income a person can earn
To predict future income levels
To show all possible combinations of two goods that can be purchased with a given income
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the budget line equation, what does the variable 'Y' represent?
The quantity of fruit
The total expenditure on goods
The price of chocolate
The monthly income
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How is the budget line graphically represented?
As a horizontal line
As a vertical line
As a straight line
As a curve
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does 'real income' refer to in the context of a budget line?
Income adjusted for inflation
Income expressed in terms of a specific good
Income before taxes
Income after savings
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the opportunity cost of buying one pound of fruit in this example?
2 bars of chocolate
3 bars of chocolate
4 bars of chocolate
1 bar of chocolate
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does the slope of the budget line represent?
The price of one good
The total expenditure
The total income
The opportunity cost of one good in terms of the other
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens if a point lies below the budget line?
It means the goods are indivisible
It represents an unaffordable combination of goods
It indicates that there is leftover income
It shows the maximum possible expenditure
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