If food is on the vertical axis and shelter on the horizontal axis, then the equation for the budget line can be expressed as
A)PsS + Pf = M.
B)F = Pf - (Ps/Pf)S.
C)S = M/Ps - (Pf/Ps)F.
D)S = M/Ps.

Question

Quizplus · Accepted Answer

According to the given scenario, food is on the vertical axis and shelter on the horizontal axis, which means that the price of the shelter (Ps) is on the horizontal axis and the price of food (Pf) is on the vertical axis. The budget line equation shows the combination of food and shelter that a consumer can buy with the given budget (M). The budget equation is given as S + PfF = M, which can be rearranged as S = M/Ps - (Pf/Ps)F, giving us the budget line equation as S = M/Ps - (Pf/Ps)F. Hence, choice C is the correct answer.

If Food Is on the Vertical Axis and Shelter on the Horizontal