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Budget Set

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Budget Set 

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.



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© University of Toronto 2008
School of Public Policy and Governance