ECON 1 Chapter 155-160: Budget Constraint
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ECON 1 Full Course Notes
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Budget constraint the different combinations of goods that a consumer can afford with a limited at given prices reasonswhy we face budget constraint budget. 117 we have to pay for goods and services we buy. 12 we have limited funds to spend trade ohs consumers are able to make between indicates one good and another. Budget line the graphical representation of a budget constraint showing the maximum affordable quantity of one good for given amounts of another good tot good y. A stop is affordable any point to the left 1 below the vine number of good x x ly intercepts or 4 we can buy if we buy zero of the other good ofgood. 2 tells opportunity cost one more x is 2 ys forgone e g slope. Relative price the price of one good relative to the price of another. T income budget line shifts rightward 1upward of x t income budget line shifts leftward 1 downward of.
