The set of all affordable consumption bundles at given prices and income.
(Dwayne Benjamin, Toronto PPG 1002H)
The budget set consists of all of the different consumption bundles that a consumer can afford to purchase. The budget set for a two good model can be represented graphically. In the diagram below, the budget set is represented by all of the space underneath the budget line:
Definition prepared by students at the University of Toronto School of Public Policy and Governance and edited by Ben Eisen.
Graphics developed by Dwayne Benjamin.