Question

Assume the following is the Budget Equation for a consumer: 170 Tequila + 32 Vodka = 2,810 What would be the intercept of the budget line on the Tequila axis?

Answer 1

Answer:

Explanation:

Let:

$y=Tequila\\x=Vodka$

So:

$170y+32x=2810$

This is an equation of a line. Let's represent it in its Slope–intercept form:

$Subtract\hspace{3}32x\hspace{3}from\hspace{3}both\hspace{3} sides:\\170y=2810-32x\\\\Divide\hspace{3}both\hspace{3}sides\hspace{3}by\hspace{3}170\\\\y=\frac{281}{17}-\frac{16}{85}x$

In order to find the intercept of the budget line on the Tequila axis, we need to evaluate the function for x=0, so:

$y=\frac{281}{17} -\frac{16}{85} (0)=\frac{281}{17} \approx16.53$