1. Suppose a consumer consumes two goods, X and Y. The slope of the budget constraint equals the a. relative price of the two goods.

a. relative price of the two goods

b. marginal rate of substitution.

c. rate at which the consumer will give up X to gain Y while maintaining the same level of utility.

d. All of the above are correct.

2. Government vouchers to purchase food, also known as food stamps, are an example of

a. an in-kind transfer.

b. life-cycle income.

c. a negative income tax.

d. permanent income.