The diagram shows the demand curve for a good.
What can be concluded about a single downward-sloping demand curve?
consumers increase demand when their incomes rise
consumers plan to buy less when prices rise
firms produce less as prices rise
firms sell more when prices rise
What is not a function of prices in a market economy?
prices allow income to be distributed equally
prices ration scarce resources among economic agents
prices rise and fall to reflect shortages and surpluses
prices send information to consumers and producers
What is the definition of price elasticity of demand?
the responsiveness of quantity demanded of a product to a change in income of consumers
the responsiveness of quantity demanded of a product to a change in the price of a complementary product
the responsiveness of quantity demanded of a product to a change in the price of that product
the responsiveness of quantity demanded of a product to a change in the price of a substitute product
How are economic decisions determined in a market economic system?
by a mixture of market forces and government intervention
by central planners of production and consumption
by government regulation of the price mechanism
by the forces of demand and supply