A consumer budget is Rs 40 . He is buying good -1 and good-2 . Price of good -1 is Rs 8 per unit and of good -2 is Rs 10 per unit . Draw a budget line on the basis of these figures

Dear Student, 

Price of good 1= $₹$8
Price of good 2= $₹$10
Budget of the consumer= $₹$40
If we take good 1 to be x and good 2 to be y, 

8x+10y=40

​​​​​​Simplifying the equation, we get

4x+5y=20

When x=0, y= 20/5, which is 4.
When y=0, x=20/4, which is 5.
So we know that the line passes thrpugh two points (0,4) and (5,0).


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Hope that this helps.

Regards