When the price of one good changes,and all others stay the same:
A)the change in relative prices is reflected in a change in the slope of the budget constraint.
B)the change in relative prices can be thought of as a change in the opportunity costs of each good.
C)the change in relative prices is reflected in a change in the marginal utility per dollar spent on each good.
D)All of these statements are true.

Question

Quizplus · Accepted Answer

When the price of one good changes and all others stay the same, the change in relative prices is reflected in a change in the slope of the budget constraint (A), the change in relative prices can be thought of as a change in the opportunity costs of each good (B), and the change in relative prices is reflected in a change in the marginal utility per dollar spent on each good (C). Therefore, all of these statements are true (D).

When the Price of One Good Changes,and All Others Stay