A consumer has an income of $30,047. She consumes only two goods, tacos and beer

Question

A consumer has an income of $30,047. She consumes only two goods, tacos and beer. Tacos cost $3.48 each and a bottle of beer costs $3.02. If tacos are on the vertical axis, what is the slope of the budget constraint? (Do not forget to include the sign and round to two decimal places)
A consumer has an income of $30,047. She consumes only two goods, tacos and beer. Tacos cost $3.48 each and a bottle of beer costs $3.02. If tacos are on the vertical axis, what is the slope of the budget constraint? (Do not forget to include the sign and round to two decimal places)
A consumer has an income of $30,047. She consumes only two goods, tacos and beer. Tacos cost $3.48 each and a bottle of beer costs $3.02. If tacos are on the vertical axis, what is the slope of the budget constraint? (Do not forget to include the sign and round to two decimal places)

Explanation / Answer

Calculate the slope of the budget constraint -

Slope of the budget constraint = -Price of the good on vertical axis/Price of the good on horizontal axis

Tacos is taken on the vertical axis and beer is taken on the horizontal axis.

Price of taco = $3.48

Price of bottle of beer = $3.02

Calculate the slope of the budget constraint -

Slope = -Price of taco/Price of beer

Slope = -3.48/3.02

Slope = -1.15

The slope of the budget constraint is -1.15

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