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प्रश्न
How does the budget line change if the consumer’s income increases to Rs 40 but the prices remain unchanged ?
उत्तर
M2 = Rs 40
P1 = Rs 4
P2 = Rs 5
Initial equation of the budget line:
4x1 + 5x2 = 20
New equation of the budget line:
4x1 + 5x2 = 40
As M has increased, the consumer can now purchase more of both the goods and the budget line will shift parallelly outwards to A’B’ from AB.
Horizontal intercept will be `= M/P_2 = 40/4 = 10`
Vertical intercept will be `= M/P_2 = 40/5 = 8`
The slope of the new budget line will be the same as that of the old budget line.
`-P_1/P_2 = 4/5`
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संबंधित प्रश्न
Define budget set.
Explain the meaning of Budget line.
A consumer buys 200 units of a good at a price of Rs 20 per unit. Price elasticity of deamnd is (–) 2. At what price will he be willing to purchase 300 units? Calculate.
Find Consumption Expenditure from the following:
|
National Income |
= Rs 5,000 |
|
Autonomous Consumption |
= Rs 1,000 |
|
Marginal propensity to consume |
= 0.80 |
What do you mean by the budget set of a consumer?
What is a budget line?
Explain why the budget line is downward sloping.
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
Write down the equation of the budget line.
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
How much of good 1 can the consumer consume if he/she spends his/her entire income on that good?
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
How much of good 2 can be consumed if he/she spends his/her entire income on that good?
A consumer wants to consume two goods. The prices of the two goods are Rs 4 and Rs 5 respectively. The consumer’s income is Rs 20.
What is the slope of the budget line?
What happens to the budget set if the prices as well as the income double?
Suppose a consumer wants to consume two goods that are available only in integer units. The two goods are equally priced at Rs 10 and the consumer’s income is Rs 40.
(i) Write down all the bundles that are available to the consumer.
(ii) Among the bundles that are available to a consumer, identify those that cost will him/her exactly Rs 40.
Answer the following question.
What can cause a change in the budget line? Explain.
Answer the following question:
What is the budget line? Why the budget line is left to right downward sloping?
