The Income Effect of a Price Change Is the Effect

question 80

Multiple Choice

The income effect of a price change is the effect on consumption changes as a result of a change in:

• A)income when all prices change in the same proportion.
• B)purchasing power caused by a change in the price of the good.
• C)income caused by a change in the price of labor.
• D)income sufficient to offset the effect of a price change.

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Definitions:

Habituation

An adaptive behavioral response to repeated exposure to a stimulus, characterized by a decrease in response intensity over time.

Clinical Psychology

Area of psychology in which the psychologists diagnose and treat people with psychological disorders that may range from mild to severe.

Largest Subfield

Refers to the most populous or extensively studied area within a larger discipline or field of study.

Psychologists

Professionals specializing in the science of behavior and mind, encompassing all aspects of conscious and unconscious experience as well as thought.