Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-4-the-opportunity-set #study-session-4
Question

A simple algebraic manipulation of Equation 4 yields the budget constraint in the form of an intercept and slope:

Equation (5)

[...]

QW=I/PW−(PB/PW)*QB

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-4-the-opportunity-set #study-session-4
Question

A simple algebraic manipulation of Equation 4 yields the budget constraint in the form of an intercept and slope:

Equation (5)

[...]

?

Tags
#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-4-the-opportunity-set #study-session-4
Question

A simple algebraic manipulation of Equation 4 yields the budget constraint in the form of an intercept and slope:

Equation (5)

[...]

QW=I/PW−(PB/PW)*QB
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A simple algebraic manipulation of Equation 4 yields the budget constraint in the form of an intercept and slope: Equation (5)  QW=IPW−PBPWQB

#### Original toplevel document

4. THE OPPORTUNITY SET: CONSUMPTION, PRODUCTION, AND INVESTMENT CHOICE
aint Note: The budget constraint shows all the combinations of bread and wine that the consumer could purchase with a fixed amount of income, I, paying prices P B and P W , respectively. <span>A simple algebraic manipulation of Equation 4 yields the budget constraint in the form of an intercept and slope: Equation (5)  QW=IPW−PBPWQB Notice that the slope of the budget constraint is equal to –P B /P W , and it shows the amount of wine that Warren would have to give up if he were to purchase another sli

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