Answer to Question #58041 in Microeconomics for Rj

Question

If food is on the horizontal axis, and shelter on the vertical axis, then the equation for the budget line can be expressed can be expressed as?

Answer 1

If food is on the horizontal axis, and shelter on the vertical axis, then the equation for the budget line can be expressed as I = Pf*Qf + Ps*Qs; Qs = (I - Pf*Qf)/Ps, where Pf - price of food, Ps - price of shelter, Qf - quantity of food, Qs - quantity of shelter, I - budget (income).