Purchase Solution

Budget line

Not what you're looking for?

Ask Custom Question

Suppose a consumer buy books and DVDs. The price of a book is $10, the price of a DVD is $20, and the consumer's income is $400. If books are measured on the vertical axis and DVDs are measured on the horizontal axis, then the slope of the budget line is?

Purchase this Solution
Solution Summary

This solution shows how to use the provided information to find the slope of the budget line.

Solution Preview

If the consumer were to buy only books, he could by 40 units (i.e. the point ...

Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

View More Free Quizzes
Related BrainMass Solutions

  • Food Stamp Program and Consumer's Budget Line

    The red line is the budget line in the absence of food stamps. The blue line is the budget line with $284 of food stamps.

  • Consumer Budget Constarint

    It is constraint by the budget line: Y = 60 - 3X. Consumer can consume any combination of X and Y below the budget line 1 (ie. within the triangle below budget line 1).

  • Budgets

    In other words, the static budget is the "original" budget. The static budget variance is the difference between any line-item in this original budget and the corresponding line-item from the statement of actual results.

  • budget lines before and after inflation and income increase

    After these changes, has Ina's budget line become steeper, less steep, or equally as steep compared to before? b. After these changes, has Ina's budget line shifted outward, inward, or not at all, compared to before? a.

  • Budget schedules

    Revenues budget b. Production budget in units c. Direct material usage budget and direct material purchases budget d. Direct manufacturing labor budget e. Manufacturing overhead budget f.

  • Indifference and demand curves

    We are given two points (80,0) and (0,40) on budget line Slope of budget line=(40-0)/(0-80)=-0.5 Negative sign indicates that budget line is negatively slopped. d. What is the price of good Y?

  • Indifference Curves and budget lines

    122144 Budget Line Given the following information, DESCRIBE the budget line for the consumer: Be sure to state what the axes are and provide numbers for the vertical and horizontal intercepts. Also what is the slope of the line?

  • Using the Demand Curve and the Utility-Maximizung Rule

    The utility maximization point is where the indifference curve is just tangent to the budget line. This solution describes the budget line for a consumer and overlays several indifference curves on the line.

  • Drawing budget lines

    Draw the family's budget line if it were given $200 per month in cash, rather than in food via the above food stamps program. Explain (compare it to the food stamps budget line).

View More Related Solutions