A budget set is the collection of all possible bundles of goods that a consumer can afford given income and prices.
If income is M and prices are P1,P2 for goods x1,x2, then:
P1x1+P2x2≤M
This inequality represents all affordable bundles.
The boundary of the budget set is:
P1x1+P2x2=M
This is the budget line, showing bundles that exactly exhaust income.
All points on or inside the budget line are affordable.
Points outside are not attainable with the given income.
Hence, the correct answer is:
Set of bundles available to the consumer.