A consumer's income is Rs 200. He spends it on purchase of goods X and Y. Prices of X and Y are Rs 40 and Rs 20 per unit respectively. Answer the following question. (a) Write the equation of his budget line. (b) Write two such combinations of X and Y which lie on the budget line. (c) Write two such combination of X and Y which are a part of his budget set but do not lie on his budget line

A consumer's income is Rs 200. He spends it on purchase of goods X and

1.	A consumer's income is Rs 200. He spends it on purchase of goods X and Y. Prices of X and Y are Rs 40 and Rs 20 per unit respectively. Answer the following question. (a) Write the equation of his budget line. (b) Write two such combinations of X and Y which lie on the budget line. (c) Write two such combination of X and Y which are a part of his budget set but do not lie on his budget line
Answer» Solution :(a) Given : PRICE of `x (P_(x)) = Rs 40` Price of `y (P_(y)) = Rs 20`, Income of the consumer = Rs 200. Now, the equation of budget line will be, `40 + 20 y = 200` (b) (i) `1X + 8y`,(ii) `2x + 6y` (c) (i) `1 x + 2Y`, (ii) `2x + 2y`