Question

Compare and contrast the notion of a budget constraint and an isocost curve. How are they alike? How are they different? Explain

Answer 1

isocost curve and budget constraint are similar in a way that both actually represent the quantity of goods in a combination where isocost curve actually uses the combination of goods which can be produced at the same cost while budget constraint uses the combination of goods which can be purchased at a fixed budget. But the difference between both of them is that budget constraint is seen from a consumer perspective while isocost curve is usually seen from a producer perspective