A set is a collection of distinct or well defined objects like (5, 6, 7) or (a, b, c). For example listing of all residents of Delhi or all animals in a zoo is difficult. Thus a set is also formed by developing a criterion for membership. For example the set of all positive numbers between 1 and 10 or set of all points lying on the line x + y = 4.
In managerial economics the need is to define an opportunity set of a decision maker, i.e., the set of alternative actions which are feasible. For example, the opportunity set of a consumer is the set of all combinations of goods which the consumer can buy with his given income. Given the consumer’s budget and prices of all goods, the opportunity set is well defined, and we can find out whether the consumer can buy a combination of goods or services which form s opportunity set. This opportunity set can also be presented graphically under various conditions.
FIVE KEY FUNCTIONS OF ECONOMICS ARE REPRESENTED GRAPHICALLY: