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A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation?
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A rational consumer is consuming only two goods goods X and good why w...
Consumer's Budget Line Equation:
The consumer's budget line equation can be derived from the given information on the prices of goods X and Y as well as the total money income.
- Let the quantity of good X consumed be denoted as X and the quantity of good Y consumed be denoted as Y.
- The consumer's total money income is rupees 40, which can be represented as M = 40.
- The price of good X is rupees 4, and the price of good Y is rupees 5.
Calculating the Budget Line Equation:
The budget line equation can be represented as:
4X + 5Y = 40
This equation shows the combinations of goods X and Y that the consumer can purchase with the given total money income and prices of the goods.
Interpreting the Budget Line Equation:
- The budget line equation represents all the possible combinations of goods X and Y that the consumer can afford with a total money income of rupees 40.
- Any point on the budget line equation indicates a combination of goods X and Y that exhausts the consumer's entire income.
- The slope of the budget line is -4/5, which represents the opportunity cost of consuming one more unit of good X in terms of the quantity of good Y forgone.
In conclusion, the consumer's budget line equation, 4X + 5Y = 40, illustrates the feasible combinations of goods X and Y that the consumer can purchase with the given prices and total money income. It serves as a crucial tool in analyzing the consumer's consumption behavior and choices.
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A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation?
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A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation?.
A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A rational consumer is consuming only two goods goods X and good why with rupees 4 and rupees 5 as their respective prices her total money income is rupees 40 answer the following question based on the given information state the consumers budget line equation?.
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