Question

Kali lives on mangoes and avocados, Pm = $5, Pa = $10, and her income is $200.Identify her budget constraint equation and illustrate Kali’s budget line on a graph

with eggplants on the horizontal axis and soursop on the vertical axis.

Answer 1

Equation of Budget constraint is:

$P_mm+P_aa=M$

where Pm is the price of mangoes

Pa is the price of avocados 

m is the number of mangoes

a is the number of avocados

M is the income level.

Budget constraint equation:

$5m+10a = 200$