All other things constant, if a _____ proportion of a consumer's budget is spent on a good, the demand for the good will be more _____ and a consumer will purchase a substitute instead.
A)greater; price elastic
B)smaller; unit elastic
C)smaller; price elastic
D)greater; price inelastic
E)greater; stable

Question

All other things constant, if a _____ proportion of a consumer's budget is spent on a good, the demand for the good will be more _____ and a consumer will purchase a substitute instead. ​
A)greater; price elastic
B)smaller; unit elastic
C)smaller; price elastic
D)greater; price inelastic
E)greater; stable

Quizplus · Accepted Answer

When a greater proportion of a consumer's budget is spent on a good, the demand for that good tends to be more price elastic because consumers are more sensitive to price changes and more likely to seek substitutes.

All Other Things Constant, If a _____ Proportion of a Consumer's