what identified trade opp that budget contraints represent optimum combination or amount of one good or maximun acoundt of amount of income
Added by Vanessa F.
Step 1
A budget constraint represents the limit on the consumption choices of an individual or a household based on their income and the prices of goods. It shows the maximum amount of one good that can be purchased given a certain amount of income and the prices of the Show more…
Show all steps
Your feedback will help us improve your experience
Haricharan Gupta and 55 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
What is the budget constraint?
Haricharan G.
Suppose you are given a $100 gift card and you choose" to spend it on a number of goods. You will select a combination of goods that is best for you and that maximizes your satisfaction. Your choices will involve which of the following? A. A decision between attainable and unattainable combinations of the goods under consideration. B. The available supply of each good considered. C. A comparison of marginal benefits and marginal costs for each good considered. D. An evaluation of the unlimited resources used in the production of each good considered.
Azat N.
Draw the budget constraint for the two goods x and y that an individual consumes in the situations described below. Be precise and clearly explain your answer in each case: a) The individual has an income of 2000, and pays a price px = 10 for the good x. The good y is not available in the market. b) The individual has an income of 2000, and pays a price px = 10 for the good x. The price of the good y is py = 20 for the first 10 units, and py = 10 if y > 10. c) The individual has an income of 2000, and pays a price px = 10 for the good x. The good y can only be purchased in packages of 10 units, which price is pÿ = 150 (where ÿ is the package of 10 units of y). d) The individual has an income of 2000, and pays a price px = 10 for the good x. The good y can only be purchased in packages of 10 units, which price is pÿ = 150 (where ÿ is the package of 10 units of y), but in addition, each package of y comes with a unit of x as a gift.
Andrew D.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD
