A budget line shows the combinations of two products that a consumer can afford to buy with a given income – using all of their available budget.
The gradient of the budget line reflects the relative prices of the two products i.e. the gradient of a budget line reveals the opportunity cost
The budget line will shift when there is:
© 2021 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.