Question

In 2015, jim earnss $100, milk costs $2 per litre, and cookies cost $4 per dozen. Draw Jim's budget constraint.

Answer 1

$PA\times QA + PB \times QB = M$

where PA is price of milk and PB is price of cookies

$milk \times 2 dollars + cookies \times 4 dollars = 100 dollars$

let quantity of milk be y and cookies be x

$100=4x+2y$

$y=-2x+50$