Budgetary constraints :-

• In any given condition, utility maximizing consumer wou’d like to

reach maximum possible IC on his IC map, but he is assumed to
have limited income.

• This limitedness of income acts as a constraint on how high a

consumer can go on his IC for maximum satisfaction.

• This constraint work as a control tool on his consumption habits and

expenditure, known as Budgetary control.
 Budget line or Iso-expenditure curve

• Also known as money line, income line, price line.

• A good demanded by consumer depends upon availability of :-

a. a preference for that good.
b. purchasing power to buy good.

• The purchasing power depends upon his money income and market prices
of goods.

• Budget line shows the combination of 2 commodities that the consumer can
purchase with its money income.