With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line is equal to
A) $\pi$.
B) $w h + \pi . - T$.
C) $- w$.
D) $w$.
E) $- \pi$.

Question

With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line is equal to 
A) $\pi$.
B) $w h + \pi . - T$.
C) $- w$.
D) $w$.
E) $- \pi$.

Quizplus · Accepted Answer

The slope of the budget line in a consumption-leisure graph is equal to the negative wage rate (-w). This is because the wage rate represents the trade-off between leisure and consumption; for each additional hour worked (and thus one less hour of leisure), an individual earns their wage rate, which can be spent on consumption.

With Consumption on the Vertical Axis and Leisure on the Horizontal