A change in one input price will cause the slope of the budget line to change.

Name: A change in one input price will cause the slope of the budget line to change.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A change in the price of one input (such as labor or capital) will affect the cost of producing goods or services, which will in turn affect the slope of the budget line. For example, if the price of labor increases, the budget line will become steeper because it will require more units of output to compensate for the higher labor costs.

A Change in One Input Price Will Cause the Slope