00:01
So what does a budget constraint look like? roughly speaking, a budget constraint takes the form of income is equal to spending, right? a budget says that you can't spend more than you make, right? mathematically, this is what it looks like.
00:16
So alex's budget is 100.
00:20
That's the amount that money you can spend.
00:22
And there's two things he's spending tickets on, movies and restaurants, right? so if you think of the price of the movies times the number of movies plus the price of restaurants times the number of restaurants, this would be the algebraic form of his budget constraint, right? if we also know that the price of movies is 10 and the price of restaurant meals is 20, we can simplify the budget constraint to look something like this, right? and now we just need to test.
00:51
So a suggests that m is equal to 4, r is equal to 4.
00:57
This means that spending would be equal to 10 times 4 plus 20 times 4, which is equal to 120, right? so this one doesn't work...