Budget line & utility
![]() Everything You Need in One PlaceHomework problems? Exam preparation? Trying to grasp a concept or just brushing up the basics? Our extensive help & practice library have got you covered. | ![]() Learn and Practice With EaseOur proven video lessons ease you through problems quickly, and you get tonnes of friendly practice on questions that trip students up on tests and finals. | ![]() Instant and Unlimited HelpOur personalized learning platform enables you to instantly find the exact walkthrough to your specific type of question. Activate unlimited help now! |
Make math click 🤔 and get better grades! 💯Join for Free

Get the most by viewing this topic in your current grade. Pick your course now.
Intros
Lessons
- Budget Line & Utility Overview:
- Consumption Choices
- Consumption Possibilities Curve
- Budget Line
- Consumer Preferences
- Utility & Marginal Utility
- Consumption Possibilities Curve (Budget Line)
- Curve shows all possible consumption of the consumer
- Limited by prices and income
- Below/On the line is what consumer can afford
- Above of the line is what consumers cannot afford
- Consumer Preferences (Utility)
- The likes and dislikes of consumers
- Total Utility & Marginal Utility
- Diminishing Marginal Utility
Examples
Lessons
- Understanding Price Elasticity of Demand
You are given that the price of fruits is $3, and the price of juice boxes are $6. If you have an income of $30, list all possible choices that you can make when buying the goods, and graph them on the budget line. - You are given that the price of cups is $2, and the price of bowls are $8. If you have an income of $32, list all possible choices that you can make when buying the goods, and graph them on the budget line.
- Finding the Total Utility and Marginal Utility
Kevin likes to play soccer and basketball. For every hour of playing soccer or basketball, he gains utility. The following table shows how much utility is gained:
# of hours
Soccer Utility (per hour)
Basketball utility (per hour)
0
0
0
1
50
30
2
80
55
3
90
75
4
95
90
5
99
100
- Olivia likes to spend free time or go shopping. For every hour free time, or going shopping, she gains utility. The following table shows how much utility is gained:
# of hours
Free time Utility (per hour)
Shopping utility (per hour)
0
0
0
1
50
30
2
80
55
3
90
75
4
95
90
5
99
100