Exhibit 6-31 -Assume That a Consumer Is Initially in Equilibrium at Point

question 35

Multiple Choice

Exhibit 6-31
-Assume that a consumer is initially in equilibrium at point a in Exhibit 6-31. Then the price of good B falls. The movement from point a to point b represents

• A) the substitution effect
• B) the income effect
• C) the substitution effect minus the income effect
• D) the sum of the substitution and income effects
• E) the income effect minus the substitution effect

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Definitions:

Electrical Wiring

The system of conductors and other devices used to distribute electricity safely in buildings and machinery.

Restrictive Covenant

Clauses in a deed or lease that limit what the owner of the property or tenant can do with the property.

Public Policy

The unwillingness of the courts to enforce rights that are contrary to the general interests of the public.

Cottage Resort

A vacation facility composed of small, cozy dwellings in a scenic or rural setting, offering a relaxed atmosphere.