The Slope of the Budget Constraint

question 52

Multiple Choice

The slope of the budget constraint:

• A)changes as the marginal rate of substitution changes.
• B)is the ratio of the prices of the two goods.
• C)is the ratio of the budget to total utility.
• D)equals one, since the consumer can purchase any combination along the budget constraint.

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Definitions:

Street Cleanings

Municipality-provided services that remove dirt, litter, and debris from roads and public spaces to maintain cleanliness and sanitation.

Increases

Situations where there is a rise in the level, amount, or number of a certain variable or condition.

Public Good

A public good is a product or service that is non-excludable and non-rivalrous, meaning it can be used by many people simultaneously without diminishing its availability to others.

Nonexcludable

A characteristic of a good or service where it is impossible, or highly costly, to prevent someone from using it once it has been provided.