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Budget Line & Optimal Choice · Question 32 of 67

Question 32

HardOriginal question

Read the two statements and choose the correct option.

I. If only P₂ falls, the budget line becomes steeper.

II. If only P₁ falls, the budget line becomes flatter.

Options for question 32

Show the answer and explanation
CorrectNot quiteAnswer C

Correct answer: C

Explanation

  1. The slope's size is P₁ ÷ P₂. A lower P₂ raises it (steeper): I is true.

  2. A lower P₁ lowers it (flatter): II is true.

Concept
Price changes and the slope
Typical time
100 s
Your time
—
The rule this testsWhen income or prices change
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Ten questions from Budget Line & Optimal Choice, at your own pace.

Practise this chapter →

Ten questions from Budget Line & Optimal Choice, at your own pace.

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