BIOL 1201 Chapter : Respiration
Document Summary
How much of each product, or output to demand. How much to spend today and how much to save for the future. The budget constraint budget constraint the limits imposed on household choices by income, wealth, and product prices. choice set or opportunity set the set of options that is defined and limited by a budget constraint. First, if we assume that households confine their choices to products that improve their well-being, then a decline in the price of any product, ceteris paribus, will make the household unequivocally better off. In other words, if a household continues to buy the same amount of every good and service after the price decrease, it will have income left over. That extra income may be spent on the product whose price has declined, hereafter called good x, or on other products. The change in consumption of x due to this improvement in well-being is called the income effect of a price change.
