Answer to Question #239069 in Economics for Samket

Question

B) What is the simplified version of Dawit’s budget line equation? C

Answer 1

A budget line is a straight line that slopes downwards and consists of all the possible combinations of the two goods which a consumer can buy at a given market price by allocating all his/her income. It is an entirely different concept from that of an indifference curve, though they are both are essential for consumer equilibrium.