-Consider the budget line in the above figure. If the consumer's income is $120, then the price of a movie is
A) $12 per movie.
B) $24 per movie.
C) $5 per movie.
D) More information is needed to determine the price of a movie.

Question

-Consider the budget line in the above figure. If the consumer's income is $120, then the price of a movie is
A) $12 per movie. 
B) $24 per movie. 
C) $5 per movie. 
D) More information is needed to determine the price of a movie.

Quizplus · Accepted Answer

The budget line shows that the consumer can buy 24 movies if they spend all their income on movies. Therefore, the price of a movie must be $120/24 = $5.

-Consider the Budget Line in the Above Figure