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In this question, the correct answer is D. However, it doesn't make sense to me. The slope of the budget constraint is equal to -P
In this question, the correct answer is D. However, it doesn't make sense to me. The slope of the budget constraint is equal to
-Px /Py Hence, for the slope to be less than -1, this means that the price of good y must be greater than the price of good X for the line to be flat. What is wrong with my reasoning ? If the price of X is > price of Y, the line would have a slope greater than 1.
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