By default, images are JPEG compressed when saved as a PDF file.
How JPEG compression works
JPEG compression works by chunking similar image pixels that have slightly different color values into groups of pixels with the same color value.
The resolution of the original image impacts the effect of JPEG image compression
Bottom line - high resolution images can tolerate a greater degree of compression than low resolution images.
Resaving images, even edited images, in JPEG format does NOT reduce quality further
Resaving images that have been cropped DOES reduce quality further
Bottom line - multiple resaves of images with JPEG compression has no effect on pixels (image detail) that have not been edited. Pixels that have been edited will be "chunked" to the same degree as the pixels in the original image. In other words, images do not degrade after multiple resaves using JPEG compression.
The most common level of compression used does NOT result in any visible image degradation.
Subtle image degradation is becoming visible.
Image degradation is becoming visible.
Image degradation is clearly visible.
Image degradation is obvious
Bottom line - at typical JPEG compression levels there is no visible degradation of the original image. In fact, one has to go to unusual levels of compression before artifacts are seen (at least level 8 in Adobe Photoshop).
Images with lots of small detail compress less and mask JPEG artifacts better than images with large smooth tone areas.
Double bottom line - there is no reason to be concerned about saving images in JPEG format so long as the highest quality/least amount of compression option is selected.
Special blog production note.
Unless otherwise stated, all "Original" images were low resolution images. JPEG compression was "0" (lowest quality/highest compression). It was the only way to exaggerate the difference enough to demonstrate the issues. If I had used the actual original images - 14 megapixels in this case - the differences would mostly have been invisible. Note that the Blogger website compresses the images that I upload so there will be compression artifacts in the posted "Original" images that were not in the images that I uploaded.
I strongly encourage you to repeat any of these tests yourself with your own images to confirm, or contradict, my findings.
I'm not suggesting that you use JPEG as your preferred image file type. My intent is only to show how saving an image in the JPEG file format introduces, or does not introduce, artifacts and hopefully shed a light on some commonly held beliefs about this image file format.