This preview shows pages 1–2. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: movement causes no change in a person's utility. A Budget/Income Constraint: INC = P1 x Q1 + P2 x Q2 This can be rewritten as follows: Q2 = -(P1/P2)Q1 + INC/P2 which translates to y = mx + b y = Q2 m = -P1/P2 x = Q1 b = INC/P2 The line formed by this is called a budget line. This line represents the most of the two items that can be bought. Page 1...
View Full Document