Suppose a consumer can afford to buy 6 units of good 1 and 8 units of good 2 if she spends her entire income. The prices of the two goods are Rs 6 and Rs 8 respectively. How much is the consumer’s income?

Budget line – P₁X + P₂Y = M

Where,

P₁ – Price of Good 1 = 6

P₂ – Price of Good 1 = 8

M – Income of consumer = ?

X – Units of Good 1 = 6

Y - Units of Good 2 = 8

M = (6 × 6) + (8 × 8) = 36 + 64 = 100

Therefore, the income of consumer is Rs 100