People Change Their Consumption Choices in Response to Changes in Price

question 83

Multiple Choice

People change their consumption choices in response to changes in price because of

• A)the income effect and the substitution effect
• B)the substitution effect
• C)the utility effect
• D)the income effect
• E)both the income effect and the utility effect

---

Definitions:

Formal-Operational

Formal-operational stage is a phase in Piaget's theory of cognitive development when individuals gain the ability to think abstractly, logically, and systematically.

Intuitive Stage

A stage in Piaget's theory of cognitive development, occurring roughly between the ages of 4 and 7, where children start using intuition and perception but lack logical reasoning.

Concrete-Operational Stage

A phase in cognitive development, identified by Jean Piaget, where children begin to understand concrete, logical operations and can solve problems with physical objects.

Piagetian Stage

Stages of cognitive development proposed by Jean Piaget that describe how children's ability to think and reason evolves as they grow older.