资料简介: Chapter Two Budget Constraint Where are We in the Course? We are working on the 1st of the 3 components of microeconomics: Consumer behavior, production theory, and market. There are three elements of consumer behavior: budget constraint, preference, and choices. Consumption Choice Sets 1、A consumption choice set is the collection of all consumption choices available to the consumer. 2、What constrains consumption choice? Budgetary, time and other resource limitations. Budget Constraints Q: When is a bundle (x1, … , xn) affordable at prices p1, … , pn? A: When p1x1 + … + pnxn £ m where m is the consumer’s (disposable) income. Budget Constraints The consumer’s budget set is the set of all affordable bundles; B(p1, … , pn, m) = { (x1, … , xn) | x1 3 0, … , xn 3 0 and p1x1 + … + pnxn £ m } The budget constraint is the upper boundary of the budget set.