Shaniq consumes only magazines and CDs. Her income equals $60 per month. CDs are $12 each and magazines are $5 each. What is the equation for her budget line?
A) $60 = $12Qm + $5QCD
B) $60 = 12QCD + 5Qm
C) 12 = - 2Qm + 6
D) $60 = Qm + QCD

Question

Quizplus · Accepted Answer

The budget line equation is derived from the formula Income = Price of Good 1 * Quantity of Good 1 + Price of Good 2 * Quantity of Good 2. Here, CDs cost $12 each (Price of Good 1) and magazines cost $5 each (Price of Good 2), with an income of $60. Thus, the correct equation is $60 = 12QCD + 5Qm, where QCD represents the quantity of CDs and Qm represents the quantity of magazines.

Shaniq Consumes Only Magazines and CDs