An increase in the price per unit for trash disposal from zero to a positive quantity causes the budget line to change from:
A)a vertical line to a horizontal line.
B)having a zero slope to a negative slope.
C)having a negative slope to a positive slope.
D)a horizontal line to a vertical line.

Question

Quizplus · Accepted Answer

When the price per unit for trash disposal increases from zero to a positive quantity, it means that there is now a cost associated with disposing of trash, where previously disposing of trash was free. This change introduces a trade-off between disposing of trash and other goods or services, represented by a budget line with a negative slope, indicating that more of one good (or service) can only be obtained by giving up some of another good (or service). Initially, with no cost for trash disposal, the budget line would not accurately reflect a trade-off between trash disposal and other goods, implying an infinite or undefined slope.

An Increase in the Price Per Unit for Trash Disposal