There are two goods. You know how much of good 1 a
consumer can afford if she spends all of her income on good 1. If
you knew the ratio of the prices of the two goods, then you could
draw the consumers budget line
Persons often receive income in
lumps; e.g. monthly salary.
How is a lump of income spread over
the following month (saving now for
Or how is consumption financed by
borrowing now a
Types of Cost Curves
A total cost curve is the graph of a
firms total cost function.
A variable cost curve is the graph of
a firms variable cost function.
An average total cost curve is the
graph of a firms average total cos