The slope of the budget line in the graph shown:
A) represents the opportunity cost of the two goods relative to each other.
B) represents the relative marginal utilities from consuming the two goods.
C) measures the total utility the consumer gets from consuming the two goods.
D) is the consumer's income level.

Question

The slope of the budget line in the graph shown:
A) represents the opportunity cost of the two goods relative to each other. 
B) represents the relative marginal utilities from consuming the two goods. 
C) measures the total utility the consumer gets from consuming the two goods. 
D) is the consumer's income level.

Quizplus · Accepted Answer

The slope of the budget line represents the opportunity cost of one good in terms of the other. In this case, the slope shows how many units of good Y the consumer would have to give up to obtain one additional unit of good X, given their income and the prices of the two goods.

The Slope of the Budget Line in the Graph Shown