The Exhibit Illustrates Two Possible Demand Curves for a Product

question 76

Multiple Choice

The exhibit illustrates two possible demand curves for a product, D ₁ and D ₂. Which of the following is true regarding these demand curves?

• A) Demand curve D ₁ represents a demand curve that is relatively more elastic than demand curve D ₂.
• B) Demand curve D ₁ represents a demand curve that is relatively more inelastic than demand curve D ₂.
• C) Demand curve D ₁ represents a demand curve that shows consumer purchases being more responsive to a change in the price of the good than demand curve D ₂.
• D) Both are examples of unitary elastic demand curves.

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Definitions:

Leisure

Time spent away from work and other compulsory activities, used for relaxation or chosen activities.

Overtime

Additional time worked beyond the standard or scheduled working hours, often compensated at a higher pay rate.

Wage

A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.

Utility Function

A mathematical representation of how choices lead to different levels of happiness or satisfaction, showcasing preferences over a set of goods or outcomes.