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24 March, 11:59

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.

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  1. 24 March, 13:26
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    c. x1 + 3x2 = 6

    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
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