The Substitution Effect of a Price Change Is Described by the Statement

question 102

Multiple Choice

The substitution effect of a price change is described by the statement that:

• A)when the price of canning jars falls,consumers have more real income with the same nominal income and will buy more canning jars.
• B)when the price of canning jars falls,consumers will substitute these lower-priced canning jars for higher-priced goods.
• C)the substitution effect is the change in the number of canning jars purchased when the price of spatulas changes.
• D)the substitution effect shows how a change in income will affect the quantity of a good purchased.

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