Budget constraint

Related BrainMass Solutions

• utility functions and budget constraints

  Slope of the budget constraint = a / w Thus to find L*, slope of the utility function = Slope of the budget constraint.

• Budget Constraints - Description

  252303 What is a budget constraint? How does a budget constraint explain consumer choices when used in conjunction with indifference curves?

• Budget constraints and opportunity costs

  Sketch new budget constraint 4. What is new opp cost(in widgets) of an additional unit of the composite good Need to understand underlying reasoning for shifts in the budget constraint and the opp cost of an additional unit.

• Budget Constraint/Indifference Curve

  Diagram a representative budget constraint and indifference curve that passes through bundle A given Annette's budget is exhausted at bundle A. Is Annette maximizing utility? Why or why not?

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  The solution discusses what happens to Larry's budget constraint.

• Budget constraints

  What is a budget constraint? How does a budget constraint explain consumer choices when used in conjunction with indifference curves?

• Consumer's Opportunity Set

  It is constraint by the budget equation as above. Where, P1, P2, ...., Pn = price of good 1, price of good 2 etc.

• Optimization using Lagrangian

  The question is solved in the exact same way, only with the changed price in the budget constraint. The new budget constraint is: 80=5X1 + 5X2 Change the Lagrangian to reflect the change in the budget constraint.

• Intertemporal budget restraints

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