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3 Tutorials that teach Budget Constraints: Change in Income
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Budget Constraints: Change in Income

Budget Constraints: Change in Income

Author: Catherine Barry
Description:
This lesson will explain Budget Constraints: Change in Income
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Notes on "Budget Constraints: Change in Income"

Terms to Know

Normal Goods

Goods for which demand increases as income increases.

Inferior Goods

Goods for which demand decreases and income increases.

Budget Constraint

The graphical depiction of consumer income relative to the 

price of goods available. Where the budget constraint touches the highest 

indifference curve available, the consumer is defined to be optimizing 

consumption.

Optimal Choice

Goods and services purchased by a consumer that provides 

the highest level of utility possible.