Social Sciences and History / Unit 13 SSH 1205 short lesson, about 20 seconds
The Budget Constraint and Its Slope
Captions available
The idea
The budget constraint is all the combinations of goods someone can afford when all income is spent, the boundary of the opportunity set. Its slope is set by the relative price of the two goods. Beyond it is unaffordable.
In practice
Ten dollars: five two-dollar burgers or ten one-dollar tickets.
Where people slip
It moves out with income and pivots with a price.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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