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Suppose a consumer has $80 to spend on movie tickets and DVD rentals this month. Movie tickets cost $5 and DVD rentals cost $4. Consider this consumer's budget line.
a. Let q1 denote the number of movie tickets and q2 denote the number of DVD rentals. Give an equation for the consumer's budget line.
b. Compute the intercept of the budget line on the "movie ticket" axis.
c. Compute the intercept of the budget line on the "DVD rental" axis.
d. Find the slope of the budget line when movie tickets are on the vertical axis and DVD rentals are on the horizontal axis.
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