please write down a clear explanation of the answer of each question thanks, eue
ID: 1148891 • Letter: P
Question
please write down a clear explanation of the answer of each question
thanks,
euestiOn - ( pts) Maria consumes only milk and biscuit. When the price of milk was $9 per bottle and the price of biscuit was $5 per package, he spent his entire income to buy 5 bottles of milk and 10 packages of biscuit per month. Now the government subsidizes milk. Market prices haven't changed, but consumers get a subsidy of $5 per bottle consumed. To pay for this subsidy, the government introduced an income tax. Maria pays an income tax of S20 per month. If x is the number of bottles of milk and y is the number of packages of biscuit, derive the Marias new budget equation.Explanation / Answer
Total Income = P1*X1 + P2*X2
=> 9*5 + 5*10 = $95
Budget Line: 9*X1 + 5*X2 = 95
New Budget Line: (9 + 5)X1 + 5X2 = 95-20
=> 14*X1 + 5*X2 = 75
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