Answer to Question #109419 in Microeconomics for Rms

Question

Sara’s income is $ 120 a week. The price of book is $ 3, and the price of a football match ticket is $6.
Calculate the equation for Sara’s budget line
Draw a graph of Sami’s budget line with the quantity of books on the x-axis.
Sara’s income is $ 120 a week. The price of ticket rises from $6 to $ 12, and the price of a book is unchanged at $ 3. Explain how Sara’s budget line changes with books on the x-axis.

Answer 1

Let B be books and F footbal match tickets

$3B+6F\le120$

Changes in the price of match tickets from 6 to 12 while the price of books remain the same, will reduce the quantity of match tickets .

The budget line is going to move from L3 to L2