The budget line is useful for illustrating the notion of opportunity cost.

Name: The budget line is useful for illustrating the notion of opportunity cost.
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Question

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The budget line shows the trade-off between purchasing two goods with limited income. By choosing to allocate income towards one good, the opportunity cost is the alternative good that could have been purchased but now must be given up. Therefore, the budget line is a useful tool for illustrating the concept of opportunity cost.

The Budget Line Is Useful for Illustrating the Notion of Opportunity