Question

multiple choice question
as a result of having fixed or limited amounts of income, all consumers face which of the following?
o consumer equilibrium
o the substitute effect
o a budget constraint
o an opportunity cost

Explanation:

When consumers have fixed or limited income, they are restricted in their purchasing power. A budget constraint represents the combinations of goods and services that a consumer can afford given their income and the prices of goods. Consumer equilibrium is about maximizing utility subject to the budget - constraint. The substitute effect is related to changes in relative prices. Opportunity cost is the value of the next - best alternative forgone. A budget constraint directly results from limited income.

Answer:

C. A budget constraint