Why is the budget line always straight?

1 answer

Answer

1160713

2026-07-19 17:20

+ Follow

The budget line is always straight because it represents the trade-off between two goods that a consumer can purchase given their fixed income and the prices of those goods. It reflects a constant rate of substitution, meaning that for every unit of one good consumed, a fixed amount of the other good must be given up. This linear relationship assumes that the prices of the goods remain constant, leading to a straight line on a graph with the goods on the axes. Thus, the slope of the budget line, which indicates the opportunity cost, remains unchanged.

ReportLike(0ShareFavorite

Copyright © 2026 eLLeNow.com All Rights Reserved.