-Given the budget line in the above figure, what is the relative price of pizza?
A) 10 gallons of milk per pizza
B) 6 gallons of milk per pizza
C) 4 gallons of milk per pizza
D) 2 gallons of milk per pizza

Question

-Given the budget line in the above figure, what is the relative price of pizza?
A) 10 gallons of milk per pizza 
B) 6 gallons of milk per pizza 
C) 4 gallons of milk per pizza 
D) 2 gallons of milk per pizza

Quizplus · Accepted Answer

The relative price of pizza is determined by the slope of the budget line, which represents the trade-off between the two goods. If the budget line shows that 2 gallons of milk must be given up to obtain one more pizza, then the relative price of pizza is 2 gallons of milk per pizza.

-Given the Budget Line in the Above Figure, What Is