Question

A change in the slope of a consumer's budget constraint indicates a change in the ________. Group of answer choices price of either good purchased by the consumer consumer's tastes and preferences level of consumer satisfaction obtained from the consumption of both goods consumer's income

Answer 1

The correct answer is: price of either good purchased by the consumer.

Step-by-step explanation:

A consumer's budget constraint shows the different combinations of two goods that can be purchased by exhausting all the income. The slope of the constraint shows the opportunity cost involved in increasing the consumption of one good.

A change in the slope of the budget line shows a change in the price of either of the goods consumed. This change in price will cause the opportunity cost to change.

For instance, if the price of good X falls, the opportunity cost of an additional unit of good Y in terms of good X will fall and vice versa.