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ECON 102 (1)
Lecture 2

ECON 102 Lecture 2: Intermediate Microecon Section 3 and 4

2 Pages

Course Code
ECON 102
Hiroki Nishimura

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Intermediate Microeconomics 9.26.16 Lecture #2 _______________________________________________________________________________ budget line P 1X 1 + P 2X 2 = m => X 2 = M/P 2- P 1/P 2 X1 vertical intercept slope budget set slope of budget line = - P 1/P 2 2.) another way to draw budget line (1) compute how many x1 the consumer can buy if she uses her entire income on good 1 X 1 (max) = m/P 1 (2) " X 2 " X 2 (max)= m/P 2 budget line Section 4 Changes in the Budget Line Change In Income Suppose that m increases new budget line Recall the first way to draw the budget line x= m/p2 - P 1/P 2 X 1 vertical interceptslope does not change old budget line increases An increase in income results in a parallel shift outw
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