The diagram shows Sam's budget line. The absolute value of the slope of Sam's budget line is equal to:(Graph Description)The graph displays a budget line with "Gasoline (gallons per week)" on the vertical axis and "Coffee (pounds per week)" on the horizontal axis. The budget line is a straight line that starts at 40 gallons of gasoline with 0 pounds of coffee (on the vertical axis) and ends at 20 pounds of coffee with 0 gallons of gasoline (on the horizontal axis).Points on the line:- At 0 pounds of coffee, 40 gallons of gasoline.- At 8 pounds of coffee, 24 gallons of gasoline.- At 16 pounds of coffee, 8 gallons of gasoline.(Options)A. quantity of coffee purchased divided by the quantity of gasoline purchased.B. price of coffee divided by the price of gasoline.C. quantity of gasoline purchased divided by the quantity of coffee purchased.D. price of gasoline divided by the price of coffee.

Option B The slope of the budget line is equal to the ratio of the prices of two goods. Slope of Budget Line = Price of Coffee / Price of Gasoline As coffee is on X axis and Gasoline on Y axis. Slope of Budget Line in absolute terms = Px / Py = Price of Coffee / Price of Gasoline.Slope of Budget Line, indicates the spending trade-off between two goods; X and Y. The amount of one good that must be sacrificed in order to buy more of another good. Since the budget line is downward sloping therefore, the slope is: -Px/Py and in absolute terms it is Px / Py

Answered: The diagram shows Sam's budget line.…

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The diagram shows Sam's budget line. The absolute value of the slope of Sam's budget line is equal to the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The diagram shows Sam's budget line. The absolute value of the slope of Sam's budget line is equal to:

(Graph Description)
The graph displays a budget line with "Gasoline (gallons per week)" on the vertical axis and "Coffee (pounds per week)" on the horizontal axis. The budget line is a straight line that starts at 40 gallons of gasoline with 0 pounds of coffee (on the vertical axis) and ends at 20 pounds of coffee with 0 gallons of gasoline (on the horizontal axis).

Points on the line:
- At 0 pounds of coffee, 40 gallons of gasoline.
- At 8 pounds of coffee, 24 gallons of gasoline.
- At 16 pounds of coffee, 8 gallons of gasoline.

(Options)
A. quantity of coffee purchased divided by the quantity of gasoline purchased.
B. price of coffee divided by the price of gasoline.
C. quantity of gasoline purchased divided by the quantity of coffee purchased.
D. price of gasoline divided by the price of coffee.

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