Assume That a Consumer Has a Given Budget or Income

question 97

Multiple Choice

Assume that a consumer has a given budget or income of $10 and that she can buy only two goods, apples or bananas. The price of an apple is $2.00 and the price of a banana is $1.00. What is the slope of the budget line if the quantity of apples were measured on the horizontal axis and bananas on the vertical axis?

• A)-0.5
• B)-0.8
• C)-1.6
• D)-2

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Definitions:

First Order

In mathematics and science, a concept indicating the most immediate or primary in sequence, often used to describe equations, reactions, or effects that involve only the first power of a variable or are of the first degree.

SSE

Sum of Squared Errors; the total squared difference between each observed value and its corresponding predicted value in regression analysis.

Squares

A mathematical operation involving multiplying a number by itself.

Regression Analysis

Regression analysis is a statistical method used to model and analyze the relationship between a dependent variable and one or more independent variables.