When a person's income decreases,the slope of the individual's budget constraint stays the same because:
A) everything is relatively more expensive now.
B) everything is relatively less expensive now.
C) the relative prices of the goods haven't changed.
D) the prices of the goods change in the same proportion.

Question

Quizplus · Accepted Answer

The slope of the budget constraint is determined by the relative prices of the goods and not by changes in the individual's income level. Therefore, if the relative prices of the goods remain constant, the slope of the budget constraint will remain the same despite changes in income.

When a Person's Income Decreases,the Slope of the Individual's Budget