Budget line, explicit and implicit

Summary

• The equation of the budget line, \(p_1x_1+p_2x_2=m\) , defines an implicit relationship between \(x_1\) and \(x_2\) .
• Explicit in \(x_2:\)

\[x_2= \frac{m}{p_2}- \frac{p_1}{p_2}x_1\]

• Explicit in \(x_1:\)

\[x_1= \frac{m}{p_1}- \frac{p_2}{p_1}x_2\]