Chapter 2 Budget Constraint

The Budget Constraint  m=p1*x1+p2*x2  where I=income, assumed to be given  p1=price of x1, assumed to be given.  p2=price of x2, assumed to be given.

02.01

Key elements that affect the budget line  m (shifting the line up or down without affecting its slope)  Either p1 or p2 affects its slope and position

02.02

02.03

02.04

02.05

02.06

x1 x2 Budget line: Buy one and get the second one at half price 1234

x1 x2 Budget line: Buy one get one free

This concludes the Norton Media Library Slide Set for Chapter 2 Intermediate Microeconomics 6 th Edition by Hal R. Varian W. W. Norton & Company Independent and Employee-Owned