Step 4. Simplify the equation. Begin by multiplying both sides of the equation by 2:

Step 5. Subtract one bus ticket from both sides:

Divide each side by 4 to yield the answer:

Step 6. Notice that this equation fits the budget constraint in Figure 2.2. The vertical intercept is 5 and the slope

is –0.25, just as the equation says. If you plug 20 bus tickets into the equation, you get 0 burgers. If you plug

other numbers of bus tickets into the equation, you get the results (see Table 2.1), which are the points on

Alphonso’s budget constraint.

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2.1 • How Individuals Make Choices Based on Their Budget Constraint 31

Point Quantity of Burgers (at $2) Quantity of Bus Tickets (at 50 cents)

A

B

C

D

E

F

5

4

3

2

1

0

TABLE 2.1

0

4

8

12

16

20

Step 7. Notice that the slope of a budget constraint always shows the opportunity cost of the good which is on
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