Question

01. The equilibrium conditions for two substitute goods are given below:
SP 2P - 15 and P + 8P = 16
Find the equilibrium prices of the two goods.​

Answer 1

Answer:

Question 1. What do you mean by the budget set of a consumer?

Or

Define Budget Set. [CBSE 2011, 13] [1 Mark]

Answer: Budget set is the collection of all bundles of goods that a consumer can buy with his income at the prevailing market prices.

Question 2. What is Budget Line? [CBSE 2011, 13, 11C, A1 10][1 Mark]

Answer: Budget line is a graphical representation which shows all the possible combinations of the two goods that a consumer can buy with the given income and prices of commodities. It is also called consumption possibility line.