Question

A rational consumer is consuming only two goods, Good X and Good Y with ₹ 4 and ₹ 5 as their respective prices. Her total money income is ₹ 40. Answer the following question, based on the given information:

1. State the consumer’s budget line equation.
2. What would be the slope of the budget line?

Answer 1

1. Budget line equation: `[4Q_X+5Q_Y=40]`
2. Slope of the budget line: `[ -\frac{P_X}{P_Y}=-\frac{4}{5}]`