The slope of the budget line is equal to the ratio of:
A) marginal utilities.
B) money income to the price of the good on the horizontal axis.
C) money income to the price of the good on the vertical axis.
D) price of the good on the horizontal axis to the price of the good on the vertical axis.

Question

Quizplus · Accepted Answer

The slope of the budget line represents the rate at which a consumer can trade one good for another while maintaining the same level of total expenditure. This is determined by the ratio of the price of the good on the horizontal axis to the price of the good on the vertical axis.

The Slope of the Budget Line Is Equal to the Ratio