The total Money of a consumer in M and he spends his entire money income on the consumption of two - Economics - National Income Accounting

Question

The total Money of a consumer in M and he spends his entire money
income on the consumption of two commodities, viz X and Y the price
of X and Y are Px and Py respectively, State the budget equation

Shruti Mishra · Accepted Answer

Dear Student,
The budget line can be defined as a set of combinations of
two commodities that can be purchased if whole of a given income is
spent on them and its slope is equal to the negative of the price
ratio
Therefore, when total Money of a consumer in M and he spends his
entire money income on the consumption of two commodities, viz X
and Y the price of X and Y are Px and Py respectively,
the Budget equation will be, PxX + PyY
= M
Regards

The total Money of a consumer in M and he spends his entire money income on the consumption of two commodities, viz. X and Y. the price of X and Y are Px and Py respectively, State the budget equation.