Asked by
Aaron Johnson
on Dec 19, 2024
Verified
The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the quantity of A is measured vertically, then the slope of the budget line is
A) −0.5.
B) −1.0.
C) −2.0.
D) −2.5.
Slope of Budget Line
The slope represents the rate at which a consumer can trade one good for another while staying within their budget.
Consumer Income
The total earnings of an individual or household that can be used for saving or spending on goods and services after taxes and other deductions.
Price of A
The amount of money required to purchase a specific good or service, denoted as "A".
- Examine how fluctuations in income and prices influence an individual's budget constraint and selection process.
- Explore the consequences of price alterations on consumer choices and budgetary limitations.
Verified Answer
IA
Learning Objectives
- Examine how fluctuations in income and prices influence an individual's budget constraint and selection process.
- Explore the consequences of price alterations on consumer choices and budgetary limitations.