5.14 : العوامل المؤثرة على قيد الميزانية I

Consider John's weekly budget line, BL, with a budget of $200. When the price of a product changes, it affects his budget line, assuming other factors remain constant.

For example, when the price of food decreases to five dollars per unit, John can buy forty units with his budget if he spends all his money on food. This changes the x-intercept and rotates the budget line BL towards a new point, M, becoming BM. Point M shows that John can buy more food with the same budget.

The price decrease also means John can now buy more food for each unit of clothing he sacrifices. This flattens the slope of BL.

When the price of food increases to twenty dollars per unit, John can only afford ten units with his budget. This changes the x-intercept and rotates the budget line BL towards a new point, N, becoming BN. Point N shows that John can buy fewer units of food with the same budget.

The price increase also means John can buy fewer units of food for each unit of clothing he sacrifices, making the slope of BL steeper.