Question

Budget constraint line_________ represents all the different combinations of two commodities that a consumer can purchase, subject to a given money income and the prices of the two commodities

Select one:
a. Isoquant
b. Isocost
c. Budget constraint line
d. Indifference curve​

Answer 1

Answer:

c. Budget constraint line

Answer 2

Correct Question :

________ represents all the different combinations of two commodities that a consumer can purchase, subject to a given money income and the prices of the two commodities

Answer :

c ) Budget Constraint line.

Budget line :

Budget Line is defined as the locus of points of combinations of good 1 and good 2 which cost exactly equal to income. In other words, budget line is the line which consists of all the bundles or combinations that cost exactly equal to the Consumer's income.

Algebraically,

$P_{1} x_{1}+ P_{2} x_{2} = m$

Budget Constraint :

Budget Constraint can be defined algebraically as $P_{1} x_{1}+ P_{2} x_{2}\le \: m$

where,

• P1 = Price per unit of good 1

• P2 = Price per Unit of good 2

• x1 = No.of Units of good 1

• x2 = No.of Units of good 2

• M = Money income of Consumer

The inequality $P_{1} x_{1}+ P_{2} x_{2} \le m$ is called Consumer's Budget Constraint.