With consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line is equal to
A) w.
B) -w.
C) $\pi$.
D) -$\pi$.
E) wh + $\pi$. - T.

Question

Quizplus · Accepted Answer

The slope of the budget line is equal to the negative of the wage rate (w), which represents the opportunity cost of leisure. A higher wage rate implies a steeper slope, meaning that more consumption can be obtained for sacrificing leisure. Therefore, the slope of the budget line is -w.

With Consumption on the Vertical Axis and Leisure on the Horizontal