The slope of a budget line with x on the vertical axis and y on the horizontal axis equals A)(-income/P_x)/ (income/P_y) B)(income - P_x)/ (income - P_y) C)(income + P_x)/ (income + P_y) D)(P_x - P_y)/ (P_x + P_y) E)(P_x + P_y)/ (P_y - P_x)

Question

Quizplus · Accepted Answer

The slope of a budget line is equal to the negative of the ratio of the prices of the two goods. In this case, the price of x is on the vertical axis and the price of y is on the horizontal axis, so the slope is equal to -P_x/P_y.

The Slope of a Budget Line with X on the Vertical