Asked by Tiffani Duncan on May 07, 2024
Verified
A change in the slope of a budget line is solely the result of a change in
A) consumer preferences.
B) the price of one good relative to the other.
C) money income.
D) the slope of the indifference curve that is tangent to the budget line.
Budget Line
A graphical representation of all possible combinations of two goods that an individual can afford given their income and the prices of the goods.
- Understand the impact of price fluctuations on consumer buying behavior.
Verified Answer
JC
Jorge Carranza PenaMay 09, 2024
Final Answer :
B
Explanation :
The slope of a budget line represents the rate at which one good can be substituted for another, based on their relative prices. A change in the slope indicates a change in the price of one good relative to the other, not changes in consumer preferences, money income, or the slope of the indifference curve.
Learning Objectives
- Understand the impact of price fluctuations on consumer buying behavior.