Factors Affecting Budget Constraint II

A budget constraint or budget line is affected by a change in the income of the consumer.

For instance, a student receives a weekly allowance of $100 that he spends on buying books and snacks. If his weekly allowance doubles to $200, his purchasing power increases. He can now purchase a larger quantity of both books and snacks. The studen...

Changes in income affect John's budget line.

With John's current income, he has a budget constraint of two hundred dollars a week that can be spent on food and clothing articles. Graphically, it is depicted by the budget line BL.

If John's income doubles, he also doubles his budget to four hundred dollars. Now, he can purchase doub...