A consumer wants to consume two goods - X and Y. The prices of the goods are INR 4 and INR 5 respectively. The consumer’s income is INR 20. Which one of these is the correct equation and slope of the budget line?

4X + 5Y = 20; Slope = 4/5

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8X + 10Y = 40; Slope = 10/8

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5X + 10Y = 20; Slope = 5/4

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5X + 4Y = 20; Slope = 5/4

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Solution

The correct option is A 4X + 5Y = 20; Slope = 4/5
Let $P_{X} = I N R 4$ , $P_{Y} = I N R 5$ , and $M = I N R 20$ .
Therefore, $P_{X} X + P_{Y} Y = M$
$4 X + 5 Y = 20$
Slope $= - P_{X} / P_{Y} = - 4 / 5$

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A consumer wants to consume two goods - X and Y. The prices of the goods are INR 4 and INR 5 respectively. The consumer’s income is INR 20. Which one of these is the correct equation and slope of the budget line?

The correct option is A 4X + 5Y = 20; Slope = 4/5Let PX=INR 4, PY=INR 5, and M=INR 20. Therefore, PXX+PYY=M 4X+5Y=20 Slope =−PX/PY=−4/5

The correct option is A 4X + 5Y = 20; Slope = 4/5
Let $P_{X} = I N R 4$ , $P_{Y} = I N R 5$ , and $M = I N R 20$ .
Therefore, $P_{X} X + P_{Y} Y = M$
$4 X + 5 Y = 20$
Slope $= - P_{X} / P_{Y} = - 4 / 5$