ABSTRACT
Perhaps the most fundamental finding in economics is the “law” of the negatively sloped demand curve. Other variables held constant, an increase in the relative price of any good would decrease the amount consumed of that good. Another useful relation is that a change in income necessarily changes total expenditures on goods by the same amount. Expenditures on individual goods may change by percentage amounts that differ from the percentage change in income, and expenditures on a “few” goods might even move inversely to the income change.
