Graph 22-3
-Refer to Graph 22-3.Using the figure in panel (a), what is ratio of the price of X to the price of Y (i.e.PX/PY)?
A)50/1
B)5/1
C)1/5
D)1/50

Name: Graph 22-3 -Refer to Graph 22-3.Using the figure in panel (a), what is ratio of the price of X to the price of Y (i.e.PX/PY)? A)50/1 B)5/1 C)1/5 D)1/50
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Question

Graph 22-3 
-Refer to Graph 22-3.Using the figure in panel (a), what is ratio of the price of X to the price of Y (i.e.PX/PY)?
A)50/1 
B)5/1 
C)1/5 
D)1/50

Quizplus · Accepted Answer

The slope of the budget constraint represents the price ratio of the two goods. In panel (a), the slope is 5, indicating that the price of X relative to Y is 5 to 1, or PX/PY = 5/1.