Thread: Calculating the budget line equation

John’s income is $100 a week, CD is$10 each and price of a book is $20. John’s utility is represented by figure 1 below. (DO NOT assume U=XY) a. What is the equation for John’s budget line? b. Graph John’s budget line Here is my work: 10Qcd + 200b = 100 Qcd + 200b / 10cd * Qqb = Y / 10cd Qcd = y/10cd - 200b/10cd * Qb 100/10 cd - 200/10 cd * Qb Qcd = 10 - 20Qb Where do I go from here to find out the budget equation and the coordinates to graph the budget line? Thankyou! 2. Re: Calculating the budget line equation you typoed but apart from that have pretty much written the answer on the first line.$\displaystyle 10Q_{cd} + 20Q_{b} = 100$this is the equation of a line which you can plot. if you want to find two points to connect, try substituting values:$\displaystyle Q_{cd}=0 \rightarrow Q_b = 5$this gives you a point$\displaystyle Q_b=0 \rightarrow Q_{cd} = 10\$ this gives you a point

in the following, i used C as quantity of CDs and B as quantity of books.
plot 10C &#43; 20B &#61; 100 - Wolfram|Alpha

the wolfram plot goes into negative values. you probably should not do this.

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how to calculate budget line equation

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