(Scenario: Music Downloads and Streamed Movies)Read the scenario Music Downloads and Streamed Movies.The slope of Phillip's budget line is equal to: Scenario: Music Downloads and Streamed Movies
Phillip has an income of $300 per month,which he uses to purchase music downloads (MD)and streamed movies (SM).Each music download costs $1 and each streamed movie costs $5.
A)-0.2.
B)-5.
C)-0.4.
D)-2.5.

Question

Quizplus · Accepted Answer

The slope of the budget line is the negative of the price ratio of the two goods. Here, the price of music downloads (MD) is $1 and the price of streamed movies (SM) is $5. Therefore, the slope is -1/5 = -0.2.

(Scenario: Music Downloads and Streamed Movies)Read the Scenario Music Downloads