The larger the proportion of the consumer's budget that is spent on a product, the more elastic that consumer's demand for the product will be

Which of the following is a tool used by the Fed in the conduct of monetary policy?

A) changes in the prime rate B) issuing new government bonds and retiring old ones C) buying and selling corporate bonds D) buying and selling federal government bonds

In the above figure, if income is $8, the initial price of a soft drink is $1, and the initial price of a milkshake is $2, a decrease in the price of a milkshake to $1 will move the consumer from point ________ to point ________

A) a; b B) b; c C) a; d D) a; c