Suppose John is planning to join a sports club. Membership in the club will allow John to swim at the pool for half price. Normally swimming for an hour would cost $10. If John has an income of $1000, the club membership fee is $100, and we plot the number of visits to the pool on the horizontal axis and a composite "other goods" which have a price of $1 on the vertical axis, the slope of John's budget line after joining the club will be

Question

Quizplus · Accepted Answer

Before joining the club, John's budget line can be given by the equation:

10x + y = 1000

where x is the number of visits to the pool and y is the composite good.

After joining the club, John can swim for half price, so his new budget line can be given by the equation:

5x + y = 1000 - 100

Simplifying both equations by solving for y, we get:

y = 1000 - 10x (original budget line)
y = 900 - 5x (new budget line)

Comparing the two equations, we can see that the slope of the new budget line is -5, which is half of the slope of the original budget line (-10). Therefore, the answer is B.

Suppose John Is Planning to Join a Sports Club