Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her entire income. The prices of the two goods are Rs 6 and Rs 8 respectively. How much is the consumer’s income?
Assume, Good 1 = X, Good 2 = Y Price of X =Px, Price of Y =Py, Income = M Budget line is PxX+PyY=M After entering values, we get 6×6+8×8=M Income (M) = 100 where, X = 6 units Px=Rs. 6 Y = 8 units Py=Rs. 8
