What does every point on a budget line graph represent?
Each point on the budget line has to exhaust all $56 of José’s budget. The easiest way to find these points is to plot the intercepts and connect the dots. Each intercept represents a case where José spends all of his budget on either T-shirts or movies. … This means the y-intercept is the point (0,8).
Which description below best describes the relationship between opportunity costs and Trade-offs?
Which description below best describes the relationship between opportunity costs and trade-offs? Trade-offs are the opposite of an opportunity cost. Trade-offs decrease the opportunity cost of any decision.
Why is it in our self interest to economize or pick and choose goods and services that maximize our satisfaction?
Why is it in our self-interest to economize or pick and choose goods and services that maximize our satisfaction? because our limited incomes conflicting with our insatiable wants for goods and services. … the alternative combinations of two goods that a buyer can purchase with a given money income.
What is the slope of the budget line quizlet?
What is the slope of the budget line? What does the magnitude of the slope tells us? The magnitude of the slope tells us, the rate at which the two goods can be substituted for each other without changing the total amount of money spent.
What’s the relationship between trade offs and opportunity costs?
The trade-off is a term used to describe the courses of action given up in order to perform the preferred course of action. Conversely, the opportunity cost is defined as the cost of opting one course of action and forgoing another opportunity, to undertake that course of action.
What is the relationship between opportunity costs and trade offs quizlet?
The difference between trade offs and opportunity cost is that a trade-off is all the resources that are lost when a consumer makes a choice. An opportunity cost is the most desirable opportunity given up when a consumer makes a choice. You just studied 8 terms!
What is the budget line in economics?
Budget line definition
The budget line is a graphical delineation of all possible combinations of the two commodities that can be bought with provided income and cost so that the price of each of these combinations is equivalent to the monetary earnings of the customer.
What is a budget constraint quizlet?
Budget Constraint. The different combinations of goods a consumer can afford with a limited budget, at given price.
What is a consumption point inside the budget line?
The correct option is C is possible to afford but has some unspent income. Any point inside the budget line indicates that it is possible to afford but has spent unspent income.
What is budget line equation?
The budget line shows all the different combinations of the two commodities that a consumer can purchase, given his money income and the price of two commodities. The equation of a budget line is given by: M=PX.
What is budget line in economics class 12?
Budget line is a line showing different combinations of two goods which a consumer can attain, at his given income and market price of the goods, e.g Px.Qx + PY.Qy=M. It can shift to the right due to following reasons: (i) When the level of income increases. (ii) When price of both goods falls.
What is budget line and budget set?
A Budget Line is the borderline that contains the Budget Set. A Budget Set is the total combination of different sets of two goods that helps draw the Budget Line. Combination of Goods. The different combinations of two goods are equal to the income of the consumer.
What is budget line Class 11?
Budget line is the graphical representation of all possible combinations of two goods which can be purchased with the given income and prices . Such that the cost of each of these. combinations is equal to the income of. the consumer .
Why is budget line a straight line explain?
The slope of the budget line given by the ratio of the price of the two goods (- P1/ P2). … Constant slope and thereby, straight line is in accordance with the assumption that the prices of the two goods are given.
What is budget line and its slope?
The budget line can be defined as a set of combinations of two commodities that can be purchased if whole of the given income is spent on them and its slope is equal to the negative of the price ratio.
What is budget line 2nd PUC?
Budget Line: Budget line is the graphical representation of all possible combinations Of two goods which cost exactly equal to the income of consumer. It is a locus of different combinations of two goods which the consumer consumes and whose price exactly equals consumer’s income.
Why is budget line downward sloping?
The budget line is downward sloping because a consumer can increase the consumption of good 1 only by decreasing the consumption of good 2. … The slope of the budget line is – P1/P2 = Δx2/Δx1 which implies the rate of exchange or the rate at which good 2 can be substituted for good 1.
Does a budget line have to be straight?
Definition: A budget line is a straight line that slopes downwards and consists of all the possible combinations of the two goods which a consumer can buy at a given market price by allocating all his/her income.