The Substitution Effect Always Entails a Change in Consumption in the _____

question 160

Multiple Choice

The substitution effect always entails a change in consumption in the _____ direction as (of) the change in _____.

• A)same;marginal utility
• B)same;price
• C)opposite;price
• D)opposite;the budget

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Definitions:

Materials Markup

A pricing method where a percentage is added to the cost of materials to cover overhead and profit.

Markup Percentage

A measure of how much the price of a product or service is increased over its cost to the seller, expressed as a percentage of the cost.

Variable Product Cost

Expenses that fluctuate in direct proportion to the amount of output produced, including direct labor and raw materials.

Fixed Costs

Expenses that do not change with the level of production or sales, including rent, salaries, and insurance, providing contrast to variable costs.