CUET UG 2025 — Economics Micro

A budget set is the collection of all possible bundles of goods that a consumer can afford given income and prices.

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If income is $M$M and prices are $P_1, P_2$P1​,P2​ for goods $x_1, x_2$x1​,x2​, then:

$$P_1 x_1 + P_2 x_2 \le M$$P1​x1​+P2​x2​≤M

This inequality represents all affordable bundles.

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The boundary of the budget set is:

$$P_1 x_1 + P_2 x_2 = M$$P1​x1​+P2​x2​=M

This is the budget line, showing bundles that exactly exhaust income.

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All points on or inside the budget line are affordable.

Points outside are not attainable with the given income.

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Hence, the correct answer is:

Set of bundles available to the consumer.