Option 2: (A) - (III), (B) - (IV), (C) - (II), (D) - (I) -> For a budget line P₁X₁ + P₂X₂ = M: (A) The slope represents the rate at which one good can be substituted for another, which is -P₁/P₂ (negative of price ratio). (B) Horizontal intercept occurs when X₂ = 0, giving X₁ = M/P₁ (maximum units of good 1 affordable). (C) Vertical intercept occurs when X₁ = 0, giving X₂ = M/P₂ (maximum units of good 2 affordable). (D) Budget constraint is the inequality P₁X₁ + P₂X₂ ≤ M, showing the consumer cannot exceed their budget M. -> correct