Given the following budget line, (M = PfF + PsS) show the following by reformulating the...
Given the following budget line, (M = PfF + PsS) show the
following by reformulating the equation. Assume F (food) is on the
horizontal axis and S (shelter) is on the vertical axis.
A. The vertical intercept is ________.
B. The horizontal intercept is ________.
C. The slope of the budget line is ________.
Homework Answers
A.The vertical intercept=M/Ps
B.Horizontal intercept=M/Pf
C.Slope of the budget line=-Pf/Ps
The intercept is determined by the expenditure of the consumer when exhausting all income on the purchase of the good on the respective axis.
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Given the following budget line, (M = PfF + PsS) show the
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