A consumer wants to consumer two goods X and Y. The price of the goods are ₹2 per unit and ₹5 per unit respectively and his income is ₹30. What will be the slope of the budget line ?
Answer & explanation
Correct answer: option 2
The correct answer is option (2) : -0.4
To find the slope of the budget line, we need to use the formula for the slope of a line in a two-dimensional space:
slope=-PX/PY
where:
- PX is the price of good X,
- PY is the price of good Y.
Given:
- Price of good X, PX = ₹2,
- Price of good Y, PY= ₹5.
So, the slope of the budget line is:
Slope=-2/5
Slope=−0.4
Therefore, the slope of the budget line is: -0.4