# Budget equation

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##### Intros

###### Lessons

**Budget Equation Overview:**__The Budget Equation__- All the available options when income is used
- $Q_x P_x + Q_y P_y$ =
*I* - $Q_x \,$→$\,$ quantity of
*x*, $Q_y \,$→$\,$ quantity of =*y* - $P_x \,$→$\,$ price of
*x*, $P_y \,$→$\,$ price of =*y* - $I \,$→$\,$ income

__Changes to the Budget Equation__- Increase in the price of good
*x* - Decrease in the price of good
*x* - Increase in the price of good
*y* - Decrease in the price of good
*y*

- Increase in the price of good

##### Examples

###### Lessons

**Understanding the Changes to the Budget Constraint**

Suppose a consumer can buy two goods, fruits and candy. The price of fruits is $5 each, and the price of candies are $10 each. If the consumer as an income of $50, then find the budget equation and graph it.- Suppose you are interested in two goods, monitors and laptops. The price of monitors is $200 each, and the price of laptops are $600 each. If your total income is $1200, then find the slope and y-intercept of your budget equation.
- Suppose a consumer can buy two goods, fruits and candy. The price of fruits is $5 each, the price of candies is $20 each, and the consumer's income is $60. Suppose the income of the consumer increases to $100.
- Suppose a consumer can buy two goods, pencils and erasers. The price of pencils is $2 each, the price of erasers is $1 each, and the consumer's income is $6. Suppose the price of erasers increase to $2.