Refer to the information provided in Figure 6.1 below to answer the question(s) that follow. Figure 6.1
-Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger.
B) is 1/2 of a hamburger.
C) is 2 hamburgers.
D) changes as you move down along the budget constraint.

Question

Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.  Figure 6.1
-Refer to Figure 6.1. Along budget constraint AC, the opportunity cost of one hot dog
A) is 1/4 of a hamburger. 
B) is 1/2 of a hamburger. 
C) is 2 hamburgers. 
D) changes as you move down along the budget constraint.

Quizplus · Accepted Answer

The opportunity cost of one item in terms of another is determined by the slope of the budget constraint. If the slope indicates that for each hot dog you give up, you can get 1/2 of a hamburger, then the opportunity cost of one hot dog is 1/2 of a hamburger. This remains constant along a straight-line budget constraint.

Refer to the Information Provided in Figure 6