As the percentage of the consumer's income accounted for by a particular good decreases, demand for the good will:
A) tend to become more price elastic.
B) tend to become more price inelastic.
C) tend to become closer to unit elastic.
D) tend toward being perfectly elastic.
B
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As the price level rises relative to costs and the real wage rate falls, profits ________ and the number of firms in business ________
A) decrease; increases B) decrease; decreases C) increase; decreases D) do not change; do not change E) increase; increases
Refer to Figure 3-3. The figure above shows the supply and demand curves for two markets: the market for an original Picasso painting and the market for designer jeans. Which graph most likely represents which market?
A) Graph B represents the market for an original Picasso painting and Graph A represents the market for designer jeans. B) Graph A represents both the market for an original Picasso painting and designer jeans. C) Graph A represents the market for an original Picasso painting and Graph B represents the market for designer jeans. D) Graph B represents both the market for an original Picasso painting and designer jeans.