Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In this question, the correct answer is D. However, it doesn't make sense to me. The slope of the budget constraint is equal to -P

In this question, the correct answer is D. However, it doesn't make sense to me. The slope of the budget constraint is equal to

-Px /Py Hence, for the slope to be less than -1, this means that the price of good y must be greater than the price of good X for the line to be flat. What is wrong with my reasoning ? If the price of X is > price of Y, the line would have a slope greater than 1.

image text in transcribed
41. If a consumer's budget constraint has a slope that is less than -1: A) the consumer gets more utility from good X than from good Y. B) the price of good X is less than the price of good Y. C) the consumer gets less utility from good X than from good Y. D) the price of good X is greater than the price of good Y

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Slavery And American Economic Development

Authors: Gavin Wright

1st Edition

0807152285, 9780807152287

More Books

Students also viewed these Economics questions

Question

Know the components of a position description

Answered: 1 week ago

Question

Explain the value of a true open-door policy

Answered: 1 week ago