The following diagram shows a budget constraint for a particular consumer.
If the price of X is $5,what is the price of Y?
A) $2
B) $10
C) $30
D) $300

Question

The following diagram shows a budget constraint for a particular consumer. 
If the price of X is $5,what is the price of Y?
A) $2 
B) $10 
C) $30 
D) $300

Quizplus · Accepted Answer

The slope of the budget constraint is equal to the ratio of the prices of X and Y. Since X is $5, the slope of the budget constraint is -5/PY. Using the endpoints of the budget constraint, we can solve for PY: 
$100 = 5X + PY 
$100 = 5(20) + PY 
PY = $10

Therefore, the price of Y is $10.

The best choice(s) cannot be determined without knowing the consumer's preferences and the prices of goods in the market.

The Following Diagram Shows a Budget Constraint for a Particular