The slope of the budget line is determined by the relative prices of the two goods and is equal to:

CA Foundation · Business Economics · PYQS · September 2025
The slope of the budget line is determined by the relative prices of the two goods and is equal to:
(A) A. Total expenditure of two goods
(B) B. The price ratio of two goods
(C) C. The income level of the consumer
(D) D. The marginal utility of the goods

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. The price ratio of two goods

Topics: Theory of Demand and Supply

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