The formula for the slope of a budget line (with Y on the vertical axis) is
A)∆x/∆y
B)-x/y
C)I/Py
D)-Px/Py

Question

Quizplus · Accepted Answer

The slope of a budget line represents the opportunity cost of one good in terms of another, so it is equal to the ratio of the price of the good on the horizontal axis (Px) over the price of the good on the vertical axis (Py). Therefore, the formula for the slope of a budget line is -Px/Py, which is choice D.

The Formula for the Slope of a Budget Line (With