The budget constraint shows all combinations of two goods a consumer can afford given their income and the prices of both goods. The equation \( P_x \cdot X + P_y \cdot Y = M \) defines the boundary: any bundle on this line exhausts the entire budget, bundles below it leave money unspent, and bundles above it are unaffordable.
The slope of the budget line equals \( -P_x / P_y \), representing the opportunity cost of one good in terms of the other. For every additional unit of \( X \) purchased, the consumer must give up \( P_x / P_y \) units of \( Y \). The intercepts show the maximum quantity of each good if the consumer spent everything on just that one good: \( M / P_x \) units of \( X \) or \( M / P_y \) units of \( Y \).
The labeled points (A to F) illustrate different bundles. Points on the line are exactly affordable, spending the full budget. Points below the line are affordable but leave unused income. Points above the line exceed the budget and cannot be purchased. Click any point on the graph or in the table to highlight it and see its details.
| Bundle | Bus Tickets | Burgers | Total Cost | Status |
|---|