Budget Line

Another way that economists turn your regular life into math. A budget line is a way of charting the amount of stuff you can buy with your money.

Basically, you use a regular graph (you know, x and y axes, and all that). The x axis is one product. The y axis is another product. (Say, frozen waffles on x and Snickers bars on y). Then you plot all the combinations of x and y that a person can buy if they use all their money on those items.

So with your monthly food budget, you can buy 252 boxes of frozen waffles and zero Snickers bars. Or zero boxes of frozen waffles and 42 Snickers bars. Or 126 boxes of frozen waffles and 21 Snickers bars. Or all sorts of combinations. The budget line drawn on the graph shows all the possible combinations of those purchases that add up to your budget. From there, you can find your optimal waffle/Snickers balance.