Budget equation

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

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.
1. Find and graph the original budget line
2. Find and graph the new budget line
3. Is the slope steeper or less steep, or unchanged?
4. Calculate the slope and y-intercept of the new budget line.
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.
1. Find and graph the original budget line
2. Find and graph the new budget line
3. Is the slope steeper or less steep, or unchanged?
4. Calculate the slope and y-intercept of the new budget line.