If a consumer purchases two goods, food (measured along the $x$ axis) and housing (measured along the $y$ axis), and if the price of food is $3 per unit and the price of housing is $400 per unit, then what is the slope of the consumer's budget constraint if the consumer has an income of $600?

Question

Quizplus · Accepted Answer

The equation for the budget constraint can be written as:
$$3x+400y=600$$
Solving for $y,$ we get:
$$y=\frac{600}{400}-\frac{3}{4}x=\frac{3}{4}\left(200-x\right)$$
This is a linear equation of the form $y=a+bx$ where $a=\frac{3}{4}(200)$ and $b=-\frac{3}{4}.$ The slope of the budget constraint is the coefficient of $x,$ which is $-\frac{3}{4}.$ Therefore, the answer is B, $-3/400.$

If a Consumer Purchases Two Goods, Food (Measured Along The x