**Consumer Budget Analysis**Assume that a consumer has a given budget or income of $24 and that she can buy only two goods, apples or bananas. The price of an apple is $3.00 and the price of a banana is $2.00. 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?---**Explanation:**To find the slope of the budget line, we use the formula for the slope in terms of opportunity cost. The slope is determined by the ratio of the prices of the two goods:\[\text{Slope} = -\frac{\text{Price of Apples}}{\text{Price of Bananas}} = -\frac{3}{2}\]This indicates that for every additional apple purchased, the consumer has to give up 1.5 bananas, reflecting the trade-off between the two goods given the consumer’s budget.

32/ Assume that a consumer has a given budget or income of $24 and that she can buy only two goods, apples or bananas. The price of an apple is $3.00 and the price of a banana is $2.00. 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?

32/ Assume that a consumer has a given budget or income of $24 and that she can buy only two goods, apples or bananas. The price of an apple is $3.00 and the price of a banana is $2.00. 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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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