When speaking of the price of the good measured on the horizontal axis relative to the price of the good measured on the vertical axis, which statement is true?
A)The steeper the slope of the budget line, the more expensive the good measured on the horizontal axis.
B)The steeper the slope of the budget line, the less expensive the good measured on the horizontal axis.
C)The steeper the slope of the budget line, the more expensive the good measured on the vertical axis.
D)The slope of the budget line is independent of relative prices.
E)The flatter the slope of the budget line, the more expensive the good measured on the horizontal axis.

Question

Quizplus · Accepted Answer

The slope of the budget line represents the relative price of the good on the horizontal axis compared to the good on the vertical axis. A steeper slope indicates that the good on the horizontal axis is more expensive relative to the good on the vertical axis.

When Speaking of the Price of the Good Measured on the Horizontal