5.15 : גורמים המשפיעים על מגבלת התקציב II

Changes in income affect John's budget line.

With John's current income, he has a budget constraint of two hundred dollars a week that can be spent on food and clothing articles. Graphically, it is depicted by the budget line BL.

If John's income doubles, he also doubles his budget to four hundred dollars. Now, he can purchase double the quantities of both goods. This changes the x-intercept and y-intercept, shifting BL to a new line B1L1. Line B1L1 shows John's new budget line. It shows his increased buying capacity. For instance, bundle A on his new budget line B1L1 becomes affordable, which was previously beyond his reach.

Suppose John's income halves, he decreases his budget to one hundred dollars. This, again, changes the x-intercept and y-intercept, shifting the original budget line BL towards a new line B2L2. Line B2L2 shows John's new budget line. It shows his decreased buying capacity. Bundle C on BL, which was previously within reach, becomes unaffordable.

Income changes influence the buying capacity of consumers, affecting their buying patterns.