Suppose that a consumer has 1,000,000 dollars in income. The consumer can spend money on either Xylophones
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Suppose that a consumer has 1,000,000 dollars in income. The consumer can spend money on either Xylophones or Yachts, which you can denote as X and Y, respectively. The cost of a Xylophone is 1,000, while the cost of a Yacht is 100,000. Derive an equation in the form Y = a - bX describing the budget line, write it on a piece of paper, sketch the budget constraint, and take a picture of it and upload it. Be sure to label axes!
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