What is implication of budget line in real life.
Karthik,
A budget line represents the different combinations of two goods that are affordable and are available to a consumer, while being aware of his/her income-level and market prices of both the goods. However, if a consumer does not spend his/her whole income on the consumption of goods, it means there are savings and consumer will be inside of the original budget line.
A budget line represents the different combinations of two goods that are affordable and are available to a consumer, while being aware of his/her income-level and market prices of both the goods. However, if a consumer does not spend his/her whole income on the consumption of goods, it means there are savings and consumer will be inside of the original budget line.