Let Y = $100,Q_X = quantity of good X,and Q_W = quantity of good W,P_X = $4 and P_W = $5.The budget equation is A)100 = 4Q_X + 5Q_W. B)100 = Q_X + (4/5)Q_W. C)Q_X = 100 + (4/5)Q_W. D)Q_X = Q_W + (4/5)Y. E)Q_W = Q_X + (4/5)Y.

Question

Quizplus · Accepted Answer

The budget equation is typically represented as total income (Y) equals the total expenditure on goods and services (PxQx + PyQy...), in this case it would be 4(Q_X) + 5(Q_W) = 100. Therefore, answer A is the correct choice.

Let Y = $100,QX = Quantity of Good X,and QW

Let Y = $100,Q_X = Quantity of Good X,and Q_W