According to the Substitution Effect,a Decrease in the Price of a Product

question 151

Multiple Choice

According to the substitution effect,a decrease in the price of a product leads to an increase in the quantity of the product demanded because buyers:

• A)have more real income.
• B)purchase fewer substitute goods.
• C)purchase more of the now less expensive good.
• D)purchase more complementary goods.

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Definitions:

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Cannon-Bard Theory

A theory of emotion that suggests emotions and physiological responses occur simultaneously, not sequentially.

James-Lange Theory

A theory suggesting that emotions occur as a result of physiological reactions to events.

Two-factor Theory

A psychological theory that posits that emotions are based on two factors: physiological arousal and cognitive labeling of that arousal.