When the price of one good changes, while the prices of all other goods stay the same, the change in relative prices:
A)is reflected in a change in the slope of the budget constraint.
B)can be thought of as a change in the opportunity costs of each good.
C)is reflected in a change in the marginal utility per dollar spent on each good.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

When the price of one good changes and all other prices remain constant, it affects the slope of the budget constraint (reflecting a change in how much of one good can be exchanged for another), represents a change in the opportunity costs (since the cost of choosing one good over another has changed), and impacts the marginal utility per dollar spent (as consumers will reassess the utility gained from each dollar spent on the good with the changed price).

When the Price of One Good Changes, While the Prices