The law of demand states that
A) consumers will exhaust their incomes as they purchase goods and services at given absolute prices.
B) the quantity demanded of a good is higher at a lower relative price than at a higher relative price.
C) there is a direct positive relationship between relative price and quantity demanded.
D) if the price of a good increases both relatively and absolutely, there will be no change in quantity demanded.
Answer: B
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When more labor is unemployed than the amount at the natural unemployment rate, then real GDP ________ potential GDP
A) is equal to B) is less than C) is greater than D) cannot be compared to
Which of the following does NOT describe a compensating variation?
A. The amount of money that exactly compensates a consumer for a change in economic circumstances B. The amount of money that produces an equivalent effect on a consumer's well-being C. The most someone is willing to pay to experience something beneficial D. The least someone is willing to receive to experience something harmful