uestion 13 5 points Marcie buys only CDs and candy bars She

uestion 13 (5 points) Marcie buys only CDs and candy bars. She has a fixed income and cannot borrow. If the combination of CDs and candy bars that Marcie buys lies her budget constraint, all her income. O inside; is spending O outside; is not spending O on; is not spending O on: is spending O outside; is spending Save Page 13 of 44

Solution

Answer : The correct option is d.

Because budget constraint for a consumer shows the combinations of two good\'s quantity levels based on consumer\'s income which can be purchased by the consumer and as only two goods are purchased by the consumer based on his or her income, hence the total budget is spent on the consumption of these two goods.

Here Marcie purchase only CDs and candy bar. This means that the combinations of CDs and candy bar lies on Marcie\'s budget constraint and any combination of Marcie\'s budget constraint Marcie can purchase. As Marcie purchase only CDs and candy bar, hence Marcie spend her total income to purchase CDs and candy bar.