The slope of the _________________ is determined by the relative price of the two goods, which is calculated by taking the price of one good and dividing it by the price of the other good.
A) Opportunity cost
B) productive efficiency
C) budget constraint
D) production possibilities frontier

Question

Quizplus · Accepted Answer

The slope of the budget constraint represents the rate at which one good can be exchanged for another in the market, reflecting the relative price of the two goods. This is because the budget constraint line shows all the possible combinations of two goods that a consumer can afford given their income and the prices of the goods, with the slope indicating how many units of one good must be given up to obtain one more unit of the other good, directly relating to their relative prices.

The Slope of the _________________ Is Determined by the Relative