The consumer's income is $800.
-According to the above figure,what are the prices of goods X and Y?
A) = $10, = $8
B) = $8, = $10
C) = $100, = $80
D) = $20, = $60
E) = $60, = $20

Question

The consumer's income is $800.
-According to the above figure,what are the prices of goods X and Y?
A) = $10, = $8 
B) = $8, = $10 
C) = $100, = $80 
D) = $20, = $60 
E) = $60, = $20

Quizplus · Accepted Answer

From the figure, we can see that the budget line intersects the X-axis at $40 and the Y-axis at $50. This means that the consumer can buy 4 units of X and 5 units of Y with their entire income. To find the prices of X and Y, we need to find the slope of the budget line, which is the ratio of the prices. The slope is -40/50 = -4/5. This means that the price of Y is $10 (the denominator of the ratio) and the price of X is $8 (the numerator of the ratio). Therefore, the correct answer is B.

The Consumer's Income Is $800