1. If
all consumers are price-takers facing the same prices, then their budget lines
will all have the same slope.
2. If
all consumers are price-takers facing the same prices, then all choice sets are
the same.
3. Regardless
of which consumption bundle in her choice set a consumer chooses, she will
spend all of her available income.
4. Kinks
in budget constraints always produce non-convexities in choice sets.
5. The
only way for a consumer choice set to be non-convex is for the budget line to
be kinked.
6. When
the good on the vertical axis is a composite good, the slope of the budget line
is equal to minus the price of the good on the horizontal axis.
7. When
the good on the horizontal axis is a composite good, the slope of the budget
constraint is minus the price of the good on the vertical axis.
8. While
the endowment bundle must lie on the original budget line, it need not lie on
the budget line when prices change.
9. For
choice sets emerging from Γ’ΒΒexogenousΓ’ΒΒ income, the budget line will shift
parallel whenever both prices change by the same percentage.
10. For
choice sets generated from endowment bundles, the budget line will shift
parallel if both prices change by the same proportion.
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