At all points along a budget line a consumer is a spending t

At all points along a budget line, a consumer is:

a) spending the same amount of money,

b) obtaining the same level of satisfaction

c) equating marginal utility per dollar spent on each item purchased,

d) all of the above

e) none of the above.

Solution

Budget line shows all those combinations of two goods which the consumer can buy by spending his given money income on the two goods at their given prices.

As stated above that budget line shows all those combinations of two goods that consumer can buy using all his given money income, this implies that each combination on budget line involves the spending of same amount of money.

Thus, at all points along a budget line, a consumer is spending the same amount of money.

Hence, the correct answer is option (a).