Question

If you have an income of $18 to spend, and if commodity 1 costs $3 per unit and commodity 2

costs $9 per unit, then the equation for your budget line can be written as (Below, x 1 and x 2
are respectively the quantities of commodities 1 and 2.)
a. x1/3 + x2/9 = 18. b. (x1 + x2)/12 = 18. c. x1 + 3x2 = 6.
d. 4x1 + 10x2 = 19. e. 12(x1 + x2) = 18.

Answer 1

c. x1 + 3x2 = 6

Step-by-step explanation:

Budget Line is the combination of goods that consumer can buy with given prices & Income (spending all).

Equation: p1.x1 + p2.x2 = m

where p1 & p2 are respective prices ; q1 & q2 are respective quantities ; m is the money income.

Putting p1 = 3 , p2 = 9 as given :

3x1 + 9x2 = 18

Dividing the equation by common factor = 3, we get :

x1 + 3x2 = 6