Consider the budget line in the above figure. If the price of a magazine is $4, then the price of a hamburger is
A) $5.33.
B) $4.00.
C) $1.75.
D) $3.00.

Question

Quizplus · Accepted Answer

The budget line represents the trade-off between two goods. If the price of a magazine is $4, the slope of the budget line indicates the relative price of hamburgers. Given the options, $3.00 is the price that maintains the budget constraint.

Consider the Budget Line in the Above Figure