Which of the following statements is true about the point where the budget line cuts the horizontal axis? a) Returns the slope of the budget line. B) It shows the marginal utility of the good on the horizontal axis. C) When all of the income is spent on the good on the horizontal axis, it shows the amount that can be bought from this good. D) It shows the rate of substitution between goods. TO) It represents the bundle of goods that makes the marginal utility of income zero.

Which of the following statements is true about the point where the budget line cuts the horizontal axis? a) Returns the slope of the budget line. B) It shows the marginal utility of the good on the horizontal axis. C) When all of the income is spent on the good on the horizontal axis, it shows the amount that can be bought from this good. D) It shows the rate of substitution between goods. TO) It represents the bundle of goods that makes the marginal utility of income zero.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter6: Consumer Choices

Section: Chapter Questions

Problem 10RQ: What is the rule relating the ratio of marginal utility to prices of two goods at the optimal...

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28 -

Which of the following statements is true about the point where the budget line cuts the horizontal axis?

a)	Returns the slope of the budget line.

B)	It shows the marginal utility of the good on the horizontal axis.

C)	When all of the income is spent on the good on the horizontal axis, it shows the amount that can be bought from this good.

D)	It shows the rate of substitution between goods.

TO)	It represents the bundle of goods that makes the marginal utility of income zero.

Definition Definition Satisfaction derived from the consumption of an additional unit of any commodity.

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