The slope of a consumer's budget constraint equals ________.
A) the ratio of the income of the consumer to the price of the good measured along the horizontal axis
B) the ratio of the price of the good measured along the vertical axis to the price of the good measured along the horizontal axis
C) the ratio of the price of the good measured along the horizontal axis to the price of the good measured along the vertical axis
D) the ratio of the income of the consumer to the price of the good measured along the vertical axis

Question

Quizplus · Accepted Answer

The slope of a budget constraint is calculated as the change in the quantity of one good (measured along the horizontal axis) divided by the change in the quantity of the other good (measured along the vertical axis). Therefore, the slope equals the ratio of the price of the good measured along the horizontal axis to the price of the good measured along the vertical axis, as this represents the opportunity cost of the other good in terms of the good measured along the horizontal axis.

The Slope of a Consumer's Budget Constraint Equals ________