If you produce a graph with consumption spending on the vertical axis and disposable income on the horizontal axis, the relation between consumption and income will

Refer to the figure above. Suppose Starbucks charges $3.50 per cup for its latte. Which of the following is true?

i. At this price, the demand for Starbucks latte is inelastic. ii. If Starbucks raises the price of its latte, its revenue will increase. iii. If Starbucks lowers the price of its latte, it will increase its revenue. A) Only iii B) Only i C) Only ii D) i and ii E) i and iii

Consumers have to make tradeoffs in deciding what to consume because

A) not all goods give them the same amount of satisfaction. B) the prices of goods vary. C) they are limited by a budget constraint. D) there are not enough of all goods produced.