Asked by
denise estrada
on Dec 01, 2024
Verified
if you have an income of $80 to spend, if commodity 1 costs $4 per unit, and if commodity 2 costs $16 per unit, then the equation for your budget line can be written
A) x1 + 4x2 = 20.
B) (x1 + x2) /20 = 80.
C) x1/4 + x2/16 = 80.
D) 5x1 + 17x2 = 81.
E) 20(x1 + x2) = 80.
Budget Line
A graphical representation of all possible combinations of two goods or services that a consumer can purchase at given prices within his or her budget constraint.
Commodity 1
A basic good used in commerce that is interchangeable with other goods of the same type.
- Understand the rudiments of budget constraints and the way to calculate various goods’ combinations that can be procured on a specific budget.
- Leverage mathematical knowledge to manage predicaments concerning spending limits and purchasing potency.
Verified Answer
JD
Learning Objectives
- Understand the rudiments of budget constraints and the way to calculate various goods’ combinations that can be procured on a specific budget.
- Leverage mathematical knowledge to manage predicaments concerning spending limits and purchasing potency.