The ratio of the prices of two products that a consumer could buy with a given fixed income is equivalent to the
A)marginal rate of substitution.
B)slope of the budget line.
C)income elasticity of demand for the two products.
D)price elasticity of demand for the two products.

Question

Quizplus · Accepted Answer

The slope of the budget line represents the ratio of the prices of two goods, indicating how many units of one good a consumer must give up to purchase one more unit of another good, given a fixed income. This is directly related to the choices consumers make when allocating their income between different goods.

The Ratio of the Prices of Two Products That a Consumer