Use the following to answer questions 38-40:
Figure 4.14
-(Figure 4.14) For budget constraint 1, the price of good X and the price of good Y could equal _____, respectively.
A) $175 and $100
B) $80 and $140
C) $140 and $160
D) $6 and $4

Question

Use the following to answer questions 38-40:
Figure 4.14 
-(Figure 4.14) For budget constraint 1, the price of good X and the price of good Y could equal _____, respectively.
A) $175 and $100 
B) $80 and $140 
C) $140 and $160 
D) $6 and $4

Quizplus · Accepted Answer

The slope of the budget constraint is -5/4, which means that for every $5 increase in the price of good X, the price of good Y must decrease by $4 in order to keep the budget constraint constant. Since the budget constraint is $200, the price of good X must be $100 and the price of good Y must be $125.

Use the Following to Answer Questions 38-40