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Suppose that a there are two goods, X and Y. The price of Good X is $10 and the price of Good Y is $4. The seller of Good X offers a deal where if a consumer buys 1 unit of Good X they pay full price, but the second unit of Good X is only $8. Calculate the slope of the budget constraint between 1 unit of Good X and 2 units of Good X. (Remember to include a negative sign. Round to the nearest two decimal places if necessary.)

Respuesta :

Answer:

The slope of the budget constraint is -2.

Explanation:

There are two goods, X and Y.  

The price of Good X is $10 and the price of Good Y is $4.  

The price of the second unit of good X is $8.  

The slope of the budget line is equal to the ratio of the price of two goods.  

Hence, the slope of the budget line

= [tex]\frac{-Px}{Py}[/tex]

= [tex]\frac{-8}{4}[/tex]

= -2

The slope of the budget constraint is -2.

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