(The level of Good X is on the horizontal axis for this question.) If the price
ID: 1248650 • Letter: #
Question
(The level of Good X is on the horizontal axis for this question.) If the price consumption curve of good X slopes downward, we can be sure that as the price of good X falls:a) consumers spend less money on X even though they buy more of it.
b) consumers spend the same proportion of their budget on X, even though they buy more of it.
c) consumers spend more money on X.
d) None of the above is necessarily true, because the information provided does not allow us to determine what happens to the amount spent on X as the price of X falls.
Explanation / Answer
d) None of the above is necessarily true, because the information provided does not allow us to determine what happens to the amount spent on X as the price of X falls.
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