Question

Using the line drawing tool​, sketch the budget constraint when the price of X is ​$20​, the price of Y is ​$50​, and income equals ​$1 comma 000. Label this line​ 'BC'. ​Note: Carefully follow the instructions above and only draw the required object.

Answer 1

Check the graph below to see the Budget constraint (1,000)

Explanation:

To answer this question firstly we have to label this value $1,000, as our budget constraint. It means our budget cannot be surpassed.

Let's work with this equation x+y=1000. Rewrite into this form y=1000-x then graph it, like a regular linear function.

The Budget line represents graphically all the combinations x+y=1,000. The range shows us all values y∈ [0, 1000] and the domain are the values such as 0 ≤x≤1000. Each point over the Budget line represents a possible combination such as x+y=100.

x | y | x+y

50(20) =1000 | 0 | 1000

200 | 800 | 1000

10x+8y

(...)