The figure above shows three budget lines.
-Based on the figure above,on which budget line is the relative price of gum the highest?
A) Budget line BL₂.
B) Budget line BL₀.
C) Budget line BL₁.
D) The relative price is the same along all three budget lines.
E) To answer the question, more information is needed about the consumer's income.

Question

The figure above shows three budget lines.
-Based on the figure above,on which budget line is the relative price of gum the highest?
A) Budget line BL₂. 
B) Budget line BL₀. 
C) Budget line BL₁. 
D) The relative price is the same along all three budget lines. 
E) To answer the question, more information is needed about the consumer's income.

Quizplus · Accepted Answer

The relative price of gum is determined by the slope of the budget line, which is the same for all three budget lines if they are parallel.

The Figure Above Shows Three Budget Lines