Read the following statements - Assertion (A) and Reasoning (R):
Assertion: Equation of a budget line is: 10A+20B=50. Slope of line is 0.3.
Reasoning: Slope of the budget line is price of good A divided by price of good B.
From the given alternatives choose the correct one:
Answer & explanation
Correct answer: option 4
Slope of budget line is\(\frac{ P(A)}{ P(B)}\), that is, price of good A divided by price of good B. Here, price of A is 10 and price of B is 20. Hence slope of budget line is \(\frac{ P(A)}{ P(B)}\)= \(\frac{10 }{ 20}\)= 0.5