Question

Edmund must pay $6 each for punk rock video cassettes, ????. Edmund is paid $24 per sack for accepting garbage, ????, and his relatives send him an allowance of $48. Write an equation for Edmund’s budget line.

Answer 1

Answer:

The equation for Edmund's budget line is 6C - 24G = 48

Explanation:

A budget line shows all possible combinations of two commodities that a consumer can buy at a given income level and at given market prices of commodities. The equation of the budget line is as follows.

M = (Px).X + {Py).Y where

M = Income

Px = Price of commodity X

X = Units of commodity X purchased

Py = Price of commodity Y

Y = Units of commodity Y purchased

In this question, Edmund's income is $48. Let C represent the units of punk rock video cassettes that he buys. Each one costs $6.

In addition, rather than spending on another commodity, he earns $24 per sack for accepting garbage. Let G represent the number of garbage sacks he accepts. Putting these values in the above equation, we have:

48 = 6C - 24G

Rearranging the equation, we have the final answer, which is:

6C - 24G = 48