The Magnitude of the Slope of the Budget Line Is

question 5

Multiple Choice

The magnitude of the slope of the budget line is the

• A)relative price of the good measured on the vertical axis.
• B)relative price of the good measured on the horizontal axis.
• C)absolute price of the good measured on the horizontal axis.
• D)real price of the good measured on the vertical axis.
• E)price of the good measured on the vertical axis.

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Definitions:

Total Variable Costs

The sum of expenses that vary directly with the level of production or sales volume.

Marginal Cost

The amount of money needed to create an additional unit of a product or service.

Average Total Costs

The total costs of production (fixed and variable) divided by the quantity of output produced.

Total Fixed Costs

The sum of all costs that do not change with the level of production or services provided, such as rent and salaries.