Graph 22-3
-Refer to Graph 22-3.Using the figure in panel (b), what is ratio of the Price of Y to the price of X (i.e.PX/PY)?
A)4/1
B)1/1
C)1/4
D)1/16

Question

Graph 22-3 
-Refer to Graph 22-3.Using the figure in panel (b), what is ratio of the Price of Y to the price of X (i.e.PX/PY)?
A)4/1 
B)1/1 
C)1/4 
D)1/16

Quizplus · Accepted Answer

The ratio of PX/PY is the inverse of the slope of the budget line. From the figure in panel (b), the slope of the budget line is -4, so the inverse of this, which is the ratio of PX/PY, is 1/4. Therefore, the answer is C.

Graph 22-3 -Refer to Graph 22-3.Using the Figure in Panel (B), What