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Homework Statement
Your budget is such that if you spend your entire income, you can afford either 4 units of good x and 6 units of good y OR 12 units of x and 2 units of y.
A) What is the ratio of the price of x to the price of y?
B) If you spend all your income on x, how much x could you buy?
Homework Equations
Budget line: p1x1 + p2x2 = m
m = income
p1 = price of x
p2 = price of y
x1 = good x
x2 = good y
The Attempt at a Solution
The two budget lines (which are equal) will be:
4(p1) + 6(p2) = m
12(p1) + 2(p2) = m
So would the ratio be 4/12 = 6/2 ?
And I have no clue about B). Do I have to solve for anything? Using subsitution doesn't solve anything. I still up end up with variables.