The Consumption Set <Back to Last Page>     <Full Glossary>

Definition of The Consumption Set: The consumption set is the set of affordable consumption bundles. One way to define a consumption set is by a set of prices, one for each possible good, and a budget. Or a consumption set could be defined in a model by some other set of restrictions on the set of possible consumption bundles.

E.g. if consumer i can consume nonnegative quantities of all goods, it is standard to define x_i as i's consumption set, a member of R₊^L where L is the number of goods. Normally if the agent is endowed with a set of goods, the endowment is in the consumption set. (Econterms)

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