The Economic Plan of the Household

The consumption plan of the household consists of decisions about the quantities of the different goods it desires which it will buy in the coining period, and about the sums of money it will devote to the purchase of these different goods. If we assume that the household faces given prices, which it cannot alter, then the decision about the physical quantities of the different goods to be purchased, is one and the same as the decision about the sums of money to be devoted to their purchase. This is a realistic assumption and we shall be making it in what follows.