Consider a consumer's choice based on only two commodities i.e. X in R^2_+, where X is a set of all commodity bundles. Suppose the budget set B is B = {(x, y): p1x + p2y <= M}; x_i >= 0, i = 1,2. Which of the following statements is true?
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Budget constraint and consumer equilibrium has come up 99 times in 7 exams since 2004.
This question is on Budget set and budget line, part of Budget constraint and consumer equilibrium in Microeconomics.
Which bundles a consumer can afford, the slope of the budget line, and how income and price changes shift it.
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Question from the UGC-NET 2023 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.