Question

Define a budget line and an indifference curve. Why is the budget line a straight line? Explain.

Answer 1

Answer:

Straight Line – It indicates a continuous market rate of exchange in individual combination. Real Income Line – It denotes the income and the spending size of a customer. Tangent to Indifference Curve – It is the point when the indifference curve meets the budget line. This point is called the consumer's equilibrium.