Question : Assertion: Another name for the budget line is the consumption possibility curve.
Reason (R): Budget line is negatively sloped.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation
of Assertion (A).
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer:
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
Solution :
The budget line is also known as the pricing line, price opportunity line, and consumption possibility curve.
The price ratio between good 1 and excellent 2 determines the budget line's slope. This would be the x-axis price of the good divided by the y-axis price of the good. A budget line's slope is always negative because it slopes downward.
Hence option a is the correct answer.
