Practicing Success
Read the following statements - Assertion (A) and Reason (R)carefully and choose the correct alternative given below: |
Both Assertion (A) and Reason (R ) are true and Reason(R) is the correct explanation of Assertion (A) Both Assertion (A) and Reason (R ) are true and Reason(R) is not the correct explanation of Assertion (A) Assertion (A) is true but Reason (R ) is false Assertion (A) is false but Reason (R ) is true |
Assertion (A) is true but Reason (R ) is false |
The correct answer is Option 3: Assertion (A) is true but Reason (R ) is false Assertion (A): This statement is true. The budget set refers to all the possible combinations of two goods that a consumer can afford given their income and the prices of the goods. It encompasses all the points that satisfy the budget constraint equation (p₁x₁ + p₂x₂ ≤ M), where:
Reason (R ): Budget line includes all the possible bundle which lies below the budget line. It is incorrect. Reason incorrectly describes the budget line. The budget line represents all possible bundles of goods that can be purchased given the consumer's income and the prices of the goods.That means the cost of all the bundles on the budget line is equal to the money income of the consumer. |