When the Price of a Good Decreases, the Slope of the Budget

question 90

True/False

When the price of a good decreases, the slope of the budget line changes but the intercept associated with that good remains the same.

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Definitions:

Utility

The satisfaction or benefit derived from the consumption of goods and services.

Optimal Consumption Bundles

Combinations of goods and services that provide the highest utility to a consumer given his or her preferences and budget constraints.

Sardines

Small, oily fish within the herring family of Clupeidae, often canned and eaten by humans.

Marginal Rate

Often referred to as the marginal rate of substitution or the marginal tax rate, indicating the rate at which one can trade off one good for another or the tax rate on the next dollar earned, respectively.