**Definition: **

The budget set is the set of bundles of goods an agent can afford. This set is a function of the prices of goods and the agents endownment.

Assuming the agent cannot have a negative quantity of any good, the budget set can be characterized this way. Let **e** be a vector representing the quantities of the agent's endowment of each possible good, and **p** be a vector of prices for those goods. Let B(**p**,**e**) be the budget set. Let **x** be an element of *R*_{+}^{L}; that is, the space of nonnegative reals of dimension L, the number of possible goods. Then:

B(**p**,**e**) = {**x**: **px** <= **pe**}

(Econterms)

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