Question

What is the main similarity between the budget line and the isocost? What is the main difference?

Answer 1

The main similarity between budget line and isocost line is that both of these lines use two inputs or commodities that can have combinations, giving either the same amount of budget or similar cost. For example, the isocost line shows different combinations of two inputs giving same total cost, and budget line gives different combination of two products that will have the same budget consumed.

There are differences as well. Isocost line gives details about two input combinations, but the budget line gives details of two output combinations. Isocost line talks about cost, but budget line talks about the income.