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<p>In this the budget line has shifted inwards due to increase in the price of goods. And then we provide social security such that the past optimal bundle becomes affordable but is not optimal. So why don't we provide social security in a way that the budget line becomes same as the past one ( or to say provide social security in a way that price will virtually become same as past price) , so the past optimal bundle is again optimal?</p>

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2020-08-05T10:57:17.733Z
1. Why would you want the past optimal bundle to be optimal again?
Giskard
CC BY-SA 4.0
2020-08-05T10:57:45.000Z
2. It is somewhat strange for me that your textbook calls Slutsky income compensation "Social Security". What textbook is this?
Giskard
CC BY-SA 4.0
2020-08-05T12:11:57.837Z
Hey its an example that they used to explain the concept of income compensation. The book is intermediate microeconomics by Varian.... I am saying that according to the book, the income is compensated such that the previous optimal bundle is affordable but its not optimal..so why dont we compensate such that the  new budget line coincides with the past budget line. Thanks.
SHIVAM GUPTA
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2020-08-05T12:13:07.703Z
See my first comment. Why would we want to?
Giskard
CC BY-SA 4.0
2020-08-05T12:15:08.983Z
I got it..... if we change income , the budget line just shifts up and down...the slope does not change.... the slope is reflecting the price changes...So we cant possibly do that.
SHIVAM GUPTA
<microeconomics>
Why don't we give social security in such a way that previous optimal bundle is once agin the optimal budle?
SHIVAM GUPTA
# Why don't we give social security in such a way that previous optimal bundle is once agin the optimal budle?

(Asked by: username_0 on 2020-08-05)

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In this the budget line has shifted inwards due to increase in the price of goods. And then we provide social security such that the past optimal bundle becomes affordable but is not optimal. So why don't we provide social security in a way that the budget line becomes same as the past one ( or to say provide social security in a way that price will virtually become same as past price) , so the past optimal bundle is again optimal?

**Tags:** microeconomics

> **Comments:**
> **username_1**: 1. Why would you want the past optimal bundle to be optimal again?  
> **username_1**: 2. It is somewhat strange for me that your textbook calls Slutsky income compensation "Social Security". What textbook is this?  
> **username_0**: Hey its an example that they used to explain the concept of income compensation. The book is intermediate microeconomics by Varian.... I am saying that according to the book, the income is compensated such that the previous optimal bundle is affordable but its not optimal..so why dont we compensate such that the  new budget line coincides with the past budget line. Thanks.  
> **username_1**: See my first comment. Why would we want to?  
> **username_0**: I got it..... if we change income , the budget line just shifts up and down...the slope does not change.... the slope is reflecting the price changes...So we cant possibly do that.  

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## 0 answers

