Figure 4.5 illustrates a set of supply and demand curves for hamburgers. An increase in supply and an increase in demand are represented by a movement from

Supply curves slope upward because:

a. the quality is assumed to vary with price. b. technology improves over time, increasing the ability of firms to produce more at each possible price. c. increases in the price of a good lead to rightward shifts of the supply curve. d. rising prides provide producers with the incentives needed to increase the quantity supplied.

Goods that consumers regard as luxuries generally have

a. an income elasticity equal to 1. b. an income elasticity less than 1. c. an income elasticity greater than 1. d. a negative income elasticity.