The equation of a budget line is

P₁x₁ + P₂x₂ < MCorrect answerYour answerx₁ + x₂ = MCorrect answerYour answerP₁ + P₂ = MCorrect answerYour answerP₁x₁ + P₂x₂ = MCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

Spending on good 1 plus spending on good 2 equals the whole income M.

Concept: Equation of the budget line
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsBudget set and budget line

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Ten questions from Budget Line & Optimal Choice, at your own pace.

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Ten questions from Budget Line & Optimal Choice, at your own pace.

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The equation of a budget line is

Explanation