Lesson 4 a. In lesson 4 we write the budget constraint as I = XPX + YPY. Write this as a linear equation with Y on the left as in Y = … . What is the slope of this line. Explain this. Px*X+Py*Y=I Therefore Py*Y=I- Px*X Y=I/Py-(Px/PY)*x This equation has the linear format of y=b+mx,and thus, the slope of the budget line is –(Px/Py) The slope of the Budget Line tells how much of the good on the y axis we must give up to buy one more unit of good on the x axis, SO if we go back to the fish and…
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