Budget Constraint Graph Step 1: Determine where the budget constraint touches each axis It’s helpful to begin by determining where it touches... Step 2: Add a line and determine its slope Next, you draw the budget constraint onto the graph as a line, by directly... Step 3: Interpret the graph

Chihuahua puppies for adoption in pa2. To make utility functions easy to use we often also assume some extra characteristics: monotonicity, local non-satiation and convexity 3. We use utility functions to derive demand curve, by choosing the mix of goods that maximises utility subject to a budget constraint 4. The Engel curve then describes how the demand changes with income 5.

When the price of one good, say coffee, or p 1, increases, and the price of the other good, p 2, tea, stays the same, the budget constraint changes. But instead of a shift, the constraint rotates so that it becomes steeper when the price of good one has risen.