0
What is the relationship between indifference curve and budget constraint?
Wiki User
∙ 11y ago
The tangency point of Indifference curve and budget line shows the Marginal Rate of Substitution between X and Y commodities. Consumer's equilibrium is achieved at that point.
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
What is the tangent between a budget constraint and an indifference curve on an indifference map?
It is the equilibrium point of utility maximization.
How the indifference curve and budget line apparatus are used to derive a consumer's demand curve?
Indifference curve: series of curve reflecting the preference structure of the individual. Budget constraint: the material resource constraint the individual faces in choices. The demand curve, being inherently designated as rational, seeks to maximise utility. Thus, in a Walrasian equilibrium, the consumer construct his demand curve at the points where his contract curve equals to his budget constraint (or, in mathematical terms, when the constraint and optimal indifferences are tangent to one another). These tangencies construct a curve which is the individual's demand function.
What is difference between indifference curve and budget line?
budget line shows purchasing power of an consumer but indifference curve show willingness of consumer for two commodities.
What is the relationship between the demand-side and the federal budget deficit?
Describe the relationship between demand-side economics and the federal budget deficit.
What is the difference between indifference curve and isoquent?
The former is related to the consumer problem whereas the latter comes from the producer problem. Consumer: What is the amount of goods to consume with his budget constraint This curve represents the combinations of goods between which the consumer is indifferent. Producer: What to produce with the given amount of productive factors. The isoquant shows the combinations of factors with which the firm get the same production.
What is the tangent between a budget constraint and an indifference curve on an indifference map?
It is the equilibrium point of utility maximization.
How the indifference curve and budget line apparatus are used to derive a consumer's demand curve?
Indifference curve: series of curve reflecting the preference structure of the individual. Budget constraint: the material resource constraint the individual faces in choices. The demand curve, being inherently designated as rational, seeks to maximise utility. Thus, in a Walrasian equilibrium, the consumer construct his demand curve at the points where his contract curve equals to his budget constraint (or, in mathematical terms, when the constraint and optimal indifferences are tangent to one another). These tangencies construct a curve which is the individual's demand function.
What is difference between indifference curve and budget line?
budget line shows purchasing power of an consumer but indifference curve show willingness of consumer for two commodities.
What are the different travel constraint?
budget constraints
What is the relationship between the demand-side and the federal budget deficit?
Describe the relationship between demand-side economics and the federal budget deficit.
What is the difference between indifference curve and isoquent?
The former is related to the consumer problem whereas the latter comes from the producer problem. Consumer: What is the amount of goods to consume with his budget constraint This curve represents the combinations of goods between which the consumer is indifferent. Producer: What to produce with the given amount of productive factors. The isoquant shows the combinations of factors with which the firm get the same production.
What is project constraint?
The primary constraints are scope, time, quality and budget.
What is indifference Curve?
indifference curve is the graphical representation of the bundles of commodities for a given income level or budget that yields equal satisfaction at all the points.
What is the fundamental reason people must choose which goods to buy and consume?
They are limited by a budget constraint.
What does budget line show and what are its two basic properties?
Budget line(bl) is tangent to the indifference curve(ic) the slope of bl is same as that of ic.
What is a constraint of a project?
A constraint is a restriction (or a limitation) that can affect the performance of the project. For example, there could be a schedule constraint that the project must be completed by a predetermined date. Similarly, a cost constraint would limit the budget available for the project. Every project manager must keep these constraints in his mind during project planning as well as execution.
What is the relationship between revenues and spending in a balance budget?
dont let your other half get the money
