For an individual who consumes only two goods,X and Y,the opportunity cost of consuming one unit of X in terms of how much Y must be given up is reflected in
A) the individual's marginal rate of consumption.
B) the slope of the individual's budget constraint.
C) the slope of the individual's indifference curve.
D) None of these.

Question

Quizplus · Accepted Answer

The slope of the individual's budget constraint represents the rate at which they can trade off one good for the other. If the slope is steep, it means that giving up a small amount of one good results in a large increase in the other good. This indicates a high opportunity cost of consuming the first good. Therefore, the slope of the budget constraint reflects the opportunity cost of consuming one good in terms of the other.

For an Individual Who Consumes Only Two Goods,X and Y,the