Question

Assume the following is the Budget Equation for a consumer: 170 Tequila + 32 Vodka = 2,810 What would be the intercept of the budget line on the Tequila axis?

Answer 1

Step-by-step explanation:

Let:

`y=Tequila\\x=Vodka`

So:

`170y+32x=2810`

This is an equation of a line. Let's represent it in its Slope–intercept form:

`Subtract\hspace{3}32x\hspace{3}from\hspace{3}both\hspace{3} sides:\\170y=2810-32x\\\\Divide\hspace{3}both\hspace{3}sides\hspace{3}by\hspace{3}170\\\\y=(281)/(17)-(16)/(85)x`

In order to find the intercept of the budget line on the Tequila axis, we need to evaluate the function for x=0, so:

`y=(281)/(17) -(16)/(85) (0)=(281)/(17) \approx16.53`