if you have an income of $30 to spend, if commodity 1 costs $5 per unit, and if commodity 2 costs $10 per unit, then the equation for your budget line can be written A)6x₁ + 11x₂ = 31. B)(x₁ + x₂)/15 = 30. C)x₁ + 2x₂ = 6. D)x₁/5 + x₂/10 = 30. E)15(x₁ + x₂) = 30.

Question

Quizplus · Accepted Answer

The budget line equation is derived from the total income divided by the cost of each commodity. Here, $5x_1 + $10x_2 = $30 simplifies to x_1 + 2x_2 = 6.

If You Have an Income of $30 to Spend, If