When the Consumer Spends a Small Portion of His Income

question 368

Multiple Choice

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.

---

Definitions:

Pollution Permits

Allowances provided by government authorities that enable the holder to emit a specific amount of pollutants into the environment.

Curbing Pollution

Efforts or policies aimed at reducing or controlling the emission of pollutants into the environment to protect public health and ecosystems.

Capitalism

An economic system where private individuals own capital goods, investments, and means of production, with the goal of making profits.

Market Economy

An economic system where supply and demand from consumers drive the production of goods and services, with minimal government intervention.