Asked by
Tahjanae Henderson
on Dec 19, 2024Verified
Assume that a consumer has a given budget or income of $10 and that she can buy only two goods, apples or bananas. The price of an apple is $2.00 and the price of a banana is $1.00. What is the slope of the budget line if the quantity of apples were measured on the horizontal axis and bananas on the vertical axis?
A) -0.5
B) -0.8
C) -1.6
D) -2
Slope
A measure of the steepness or incline of a line, representing the rate at which one variable changes in relation to another.
Budget Line
A graphical representation showing all possible combinations of two goods that can be purchased with a given income and prices.
Horizontal Axis
The x-axis in a graph, typically representing the independent variable or the quantity of interest.
- Understand the concept of budget constraints and opportunity cost.
Verified Answer
LD
Learning Objectives
- Understand the concept of budget constraints and opportunity cost.