Answers ( 2 )

  1. In the diagram you can see that the budget line is the maximum combination of the two goods a buyer can purchase with his given budget. All the possible quantities which can be bought under the budget are shown as yellow shaded area. The buyer can not buy beyond his budget .

  2. Budget line is a diagrammatic presentation to show that in a given budget how much quantity of two goods can be purchased by a consumer

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