Question

State the budget equation of the consumer...​

Answer 1

Answer:

The equation y = Pb B + Pw W defines all the (B,W) pairs that cost exactly y. The equation is called the budget constraint. ... The slope of the budget line is -5, which equals - Pb/Pw. The prices cannot be learned from the graph as the slope gives only their ratio and the intercept the ratio of income to price of wine.