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i. Income of the consumer remaining constant at Rs.24, if the price of

Good-1 increases to Rs.4 then how the budget line will change?
j. Income of the consumer remaining constant at Rs.24, if the price of
Good-1 decreases to Rs.2 then how the budget line will change?

Answer: -
Given, price of Good-1, = . 3
1
price of Good-2, = . 4
2
Money income of the consumer, = . 24
Let the consumer consumes x and y units of good-1 and good-
2 respectively.
a. Equation of the budget line, . + . =
2
1
=> 3. + 4 = 24
b. Equation of the budget set, . + . <
1
2
=> 3. + 4 < 24
c. Equation of the unattainable points, . + . >
2
1
=> 3. + 4 > 24
d. Equation of the budget line, . + . =
1
2
=> 3. + 4 = 24

0 24
= 8
3
24 0
= 6
4