Question

what is budget line ?why does it slope downward

Answer 1

1. The understanding of the concept of budget line is essential for knowing the theory of consumer's equilibrium. "A budget line or price line represents the various combinations of two goods which can be purchased with a given money income and assumed prices of goods". For example, a consumer has weekly income of $60
2. The budget line is a negatively downward sloping line. ... The budget line is downward sloping because, in order to increase the consumption of one good, the consumption of the other good must be reduced, with constant M. The slope of the budget line is.