Ask Question
24 May, 16:37

The slope of the budget line is: negative, since to purchase more of one good means giving up some of the other good. positive, since income and prices are positively related. zero, since both prices and income are assumed to be constant. negative, because of the marginal rate of substitution.

+4
Answers (1)
  1. 24 May, 19:01
    0
    negative, since to purchase more of one good means giving up some of the other good

    Explanation:

    Budget Line shows combination of two goods that a consumer can consume, given prices & income.

    Equation : p1x1 + p2x2 = m;

    It is a downward sloping line, because given same money income & prices - if consumer has to increase consumption of one good, he / she can consume lesser of the other good. So, there is negative relationship between two goods & hence the budget line is downward sloping.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The slope of the budget line is: negative, since to purchase more of one good means giving up some of the other good. positive, since ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers