The Slope of a Budget Line

question 23

Multiple Choice

The slope of a budget line:

• A) is the negative of the price ratio, -P_X/P_Y
• B) depends on income.
• C) depends on preferences.
• D) is positive.

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Definitions:

Demand Functions

Mathematical expressions that relate the quantity of a good that consumers are willing and able to purchase at various prices, holding other factors constant.

Income

Earnings from work or investment, which are critical for determining spending and saving behaviors within an economy.

Utility Function

A mathematical representation in economics that quantifies the satisfaction or happiness a consumer derives from consuming goods and services.

Tape Recorder

An electronic device used for recording sound on magnetic tape and subsequently playing back the recorded audio.