Explain the meaning of budget line. What can cause a change in it? Exp

1.	Explain the meaning of budget line. What can cause a change in it? Explain
Answer» <html><body><p></p>Solution :Budget line is a <a href="https://interviewquestions.tuteehub.com/tag/graphical-7683818" style="font-weight:bold;" target="_blank" title="Click to know more about GRAPHICAL">GRAPHICAL</a> representation of all possible <a href="https://interviewquestions.tuteehub.com/tag/combinations-922706" style="font-weight:bold;" target="_blank" title="Click to know more about COMBINATIONS">COMBINATIONS</a> of two goods which can be <a href="https://interviewquestions.tuteehub.com/tag/purchased-2962400" style="font-weight:bold;" target="_blank" title="Click to know more about PURCHASED">PURCHASED</a> with given income and prices, such that the cost of each of these combinations is equal to the money income of the consumer. An increase in income causes the budget line to shift outward, <a href="https://interviewquestions.tuteehub.com/tag/parallel-1146369" style="font-weight:bold;" target="_blank" title="Click to know more about PARALLEL">PARALLEL</a> to the original line (holding prices constant). A decrease in income causes the budget line to shift inward, parallel to the original line (holding prices constant) so a consumer can buy less of both goods with less income.</body></html>

Explain the meaning of budget line. What can cause a change in it? Explain