Under a pure price system, the decision of resource allocation is made by

Refer to the above diagram. The budget line shift which moves the consumer's equilibrium position from point A to point B suggests:

A) an increase in the quantity of Y demanded. B) a decrease in the quantity of Y demanded. C) a leftward shift in the demand curve for Y . D) a rightward shift in the demand curve for Y .

Firms that exhibit price-taking behavior

A) wait for other firms to set price, take it as given, and charge a higher price. B) have outputs that are too small to influence market price and thus take it as given. C) take pricing behavior in their own hands. D) are independently capable of setting price.