Budget set
Encyclopedia
A budget set or opportunity set includes all possible consumption bundles that someone can afford given the price
s of goods and the person's income
level. The budget set is bounded above by the budget line.
Graphically speaking , all the consumption bundles that lie inside the budget constraint and on the budget constraint form the budget set or opportunity set.
By most definitions, budget sets must be compact and convex.
Price
-Definition:In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.In modern economies, prices are generally expressed in units of some form of currency...
s of goods and the person's income
Income
Income is the consumption and savings opportunity gained by an entity within a specified time frame, which is generally expressed in monetary terms. However, for households and individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and other forms of earnings...
level. The budget set is bounded above by the budget line.
Graphically speaking , all the consumption bundles that lie inside the budget constraint and on the budget constraint form the budget set or opportunity set.
By most definitions, budget sets must be compact and convex.