Question

The slope of price line (in case of commodities X and Y) is given by ______.

Options

• Taste and preferences of consumer

• Prices of both the commodities

• Price of commodity X alone

• Price of commodity Y alone

Answer 1

The slope of price line (in case of commodities X and Y) is given by Prices of both the commodities.

Explanation:

The slope of a price or budget line is determined by the ratio of the prices of the two goods. It is not determined by preferences or by just one price.