Assume the quantity of X is measured on the horizontal axis, and the quantity of Y is measured on the vertical axis. Assume the price of X is $3, and the price of Y is $6. If Amanda has $90 to spend on X and Y , then:
A) she can buy at most 30 X.
B) her budget line has a slope of - 2.
C) her budget line has a slope of -3.
D) she can buy at most 15 X.

Question

Quizplus · Accepted Answer

If Amanda has $90 to spend and X costs $3 per unit, then she can buy at most 30 units of X (90/3 = 30). If Y costs $6 per unit, then her budget line has a slope of -2 (the opportunity cost of one unit of X is two units of Y). Therefore, choice A) is the correct answer.

Assume the Quantity of X Is Measured on the Horizontal