# The two goods model

Summary

The two goods model

- Two goods: good 1 and good 2
- A single point in time
- A single individual
- \(x_1\) : consumption of good 1
- \(x_2\) : consumption of good 2
- Infinitely divisible, \(x_1≥0\) , \(x_2≥0\)
- Price of good 1: \(p_1>0\)
- Price of good 2: \(p_2>0\)
- Prices are fixed
- Consumer has income: \(m>0\)

Consumption bundle

- Consumption bundle: \(\left( x_1,x_2 \right)\) as a point in a Cartesian coordinate system