Question

How is Budget line different from Budget set? **4 Points please**

Answer 1

Budget set refers to the set of possible combination of the two goods the consumer consume which he can afford from his income and given price, whereas budget line is the graphical presentation of the whole collection of the combination of the two goods which costs the consumer exactly his income.

Answer 2

Explanation:

A budget set holds all possible combinations for two goods for all combinations of inccome and price which falls under the budget line. The budget line only encompasses those combinations for two goods for a particular income and price falling on the budget line itself.

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