When the consumer spends a small portion of his income on a good, demand will be
A) elastic.
B) unit-elastic.
C) inelastic.
D) elastic, unit-elastic or inelastic depending upon supply.
C
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If the government offers to reduce your property taxes by 10 percent if you install solar heating for your home, this would be an example of
A) police power.
B) incentives.
C) disincentives.
D) ceteris paribus.
Refer to the information provided in Figure 12.3 below to answer the question(s) that follow. 
Figure 12.3
Refer to Figure 12.3. The DVD industry is a constant-cost industry. As the demand for DVD players shifts from D to D', which of the following is least likely to result?
A. The demand for DVDs will increase. B. If the market for DVD players is perfectly competitive, economic profits in this industry will increase in the short run, but will fall back to zero in the long run. C. If the market for DVD players is competitive, the price will increase to $5.00 in the short and long run. D. More resources will be allocated to produce DVD players.