ECN 104 Lecture Notes - Cardinal Utility, Normal Good, Convex Curve
21 Sep 2014
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28 y t i l i t u l a t o. A budget line (or budget constraint) describes the limits to a household"s consumption choices. It is a schedule or curve showing various combinations of two products a consumer can purchase with a specific amount of income and given prices. Consumption movies () (six-packs (per month) per month) possibility a b c d e f. Slope of budget line is the ratio of the price of the good in the horizontal axis to the price of the good in the vertical axis. |slope|=p of movies/price of a pop =2 h t n o m i r e p s k c a p x s p o. Another example: price of good a is . 50 and price of b is . 00 and income is. Consumption choices are limited by income and prices.
