# Thread: Calculating the budget line equation

1. ## 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.
$10Q_{cd} + 20Q_{b} = 100$

this is the equation of a line which you can plot. if you want to find two points to connect, try substituting values:
$Q_{cd}=0 \rightarrow Q_b = 5$ this gives you a point

$Q_b=0 \rightarrow Q_{cd} = 10$ 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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### budget line equation calculator

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