The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the quantity of A is measured vertically, then the slope of the budget line is
A)−0.5.
B)−1.0.
C)−2.0.
D)−2.5.

Question

Quizplus · Accepted Answer

The slope of the budget line is equal to the negative of the ratio of the price of A to the price of B. In this case, the slope is equal to -8/4 = -2.

The Income of a Consumer Is $40, the Price of a Is