If the quantity of hamburgers is measured along the horizontal axis and the quantity of movies is measured along the vertical axis, and the price of a hamburger is $2.00 while the price of a movie is $12, then the slope of the budget line is
A) -1/3.
B) -3.5
C) -1/6.
D) -6.

Question

Quizplus · Accepted Answer

The slope of the budget line equals the ratio of prices of two goods, in this case, movies and hamburgers. Therefore, the slope of the budget line is -12/2 = -6. However, we need to reverse the slope because it is measured vertically, so the correct slope is 1/6. This means that the consumer can buy one movie for every six hamburgers.

If the Quantity of Hamburgers Is Measured Along the Horizontal