A Rise in the Price of Pepsi That Causes a Household

question 75

Multiple Choice

A rise in the price of Pepsi that causes a household to shift its purchasing pattern toward Coke and away from Pepsi is the ________ effect of a price change.

• A) income
• B) substitution
• C) complementary
• D) diminishing marginal utility

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Definitions:

Savings Plan

A strategy designed to help individuals allocate a portion of their income for future use, typically involving deposit accounts or investments.

Semi-Annual Deposits

Deposits made twice a year into a financial account or investment vehicle.

Compounded Quarterly

Refers to the process of calculating interest on both the initial principal and the accumulated interest from previous periods on a quarterly basis.

Compounded Semi-Annually

Interest that is computed and added to the principal twice a year, allowing the investment to grow more rapidly.