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Consumer Choice and Utility
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Economics
Concept Version 7
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Introducing the Budget Constraint

Budget Curve

Budget Curve

A budget curve demonstrates the relationship between two goods relative to opportunity costs, essentially deriving the relative value of each good based on quantity and utility. Keep in mind that moving from one point on the in to another is trading off '$x$' amount of one good for '$y$' amount of another.

Source

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    http://upload.wikimedia.org/wikipedia/commons/0/0a/Budget_constraint.svg CC BY-SA.

Related Terms

  • Trade-offs
  • utility
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