A _______ is the collection of all bundles that the consumer can buy with hisher income at the prevailing market prices.

Correct option is C

The correct answer is (c) Budget Set.

Explanation: A budget set refers to the collection of all the bundles of goods and services that a consumer can afford to buy with their given income, at the prevailing market prices. It represents all possible combinations of goods and services a consumer can choose from within their budget constraints.

Information Booster

• Budget Line: A budget line is a graphical representation of the budget set. It shows all the possible combinations of two goods that a consumer can purchase given their income and the prices of the goods.
• Budget Set vs Budget Line: The budget set includes all combinations of goods, while the budget line represents the specific combinations that exactly exhaust the consumer's income.
• Utility Maximization: Consumers use their budget set to maximize their utility by choosing the best combination of goods that give them the most satisfaction within their budget.