Household budget line items11/5/2023 In our situation, 20, Y = 20, the price of chocolate is equal to 1. Plot what essentially this budget line will look like. These numbers in here and then we can actually All over that over the price of chocolate. Times the quantity of fruit all of that over the price of chocolate. The price of chocolate minus the price of fruit You get the quantity of chocolates, is going to be equal to your income, your income divided by The quantity of chocolate we just divide both sidesīy the price of chocolate and then you get it,Īnd I'll flip the sides. To your right hand side which is just the price of chocolate times the quantity of chocolate. Minus the price of fruit times the quantity of fruit. This cancels out, the left hand side becomes your income I'm going to subtract itįrom the left hand side and the right hand side and the whole point is to get rid of it from the right hand side. Just use with these numbers you could just see the Make it a little bit easier to understand but I like to keep it general first. The numbers in first and that might actually Let's subtract the price of fruit times the quantity of fruit and I could substitute Yellow part right over here and the best way to do that is to subtract it from both sides. If I want to solve for that, the best way I could isolate Let me make that orange so we know that this is We have our income, our income Y = price of chocolate times the quantity of chocolate plus the price of fruit First, I'm just going to rewrite this without expenditures in between. Graph it I like to put it, since I've put quantity of chocolate on the vertical axis here, I'd like to solve this equationįor quantity of chocolate as a function of quantity fruit and it should make it pretty Let's put the quantity of fruit on this axis over here. Why don't we put the quantity of chocolate on this axis over here and What we can do is, and let's do that, we can graph the quantity You know what the Ps are and the Y and then you couldĪctually graph one of these quantities relative to the other. Would know what this is, you would know what this is and this is. I think these were the prices I used in a per pound of fruit. Is equal to $1 per bar and the price of fruit We'll plot this in a second, the price of chocolate For example, if Y = $20 a month and the price, actually And then the amount you spent on fruit will be the price of fruit per pound times the quantity of fruit. On chocolate and fruit? Well, there's going to be the amount that you spend on chocolate will be the price of chocolate times the quantity of chocolate you buy which is the number of bars. What are going to be your expenditures assuming you spend it all You could buy chocolate by the bar or fruit by the pound. That 2 goods that you buy areĮither chocolate or fruit. That we've been doing using in recent videos. But let's say you canĬhoose between 2 goods and let's just take goods Obviously, most people buy many more or they at least areĬhoosing between many, many more than two goods. We can make a model we are going to only assume that you can spend on two different goods and that's so that we can actually plot all the combinations onĪ two dimensional surface like the screen over here. Assuming in our little model here that you're not going Your income is equal to your expenditures. Income in a month is Y and lets say that you I'll do it variables and then I'll also do Let's say that you have an income and I'll do it both in the abstract and the concrete. What are all the different possibilities that you can actually buy? That's really what a budget line is. Introductory algebra course where A, you've gotten aĬertain amount of money and you can spend it on aĬertain combination of goods. It's a derivative idea of what you've seen and often in an What I want to do in this video is introduce you to the
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |