Refer to Exhibit 4

question 46

Multiple Choice

Refer to Exhibit 4. Suppose that the consumer must choose between buying socks and belts. Also, suppose that the consumer's income is €100. Suppose that the price of a pair of socks falls from €5 to €2. The substitution effect is represented by the movement from point? ​ ​

• A) Z to point X.
• B) X to point Y.
• C) X to point Z.
• D) Y to point X.

---

Definitions:

Reinforce

To strengthen a behavior, action, or concept, usually through repetition or reward.

Punishment

A consequence or penalty given for a perceived misbehavior or infringement, intended to reduce or eliminate that behavior.

Unpleasant Event

An occurrence that is undesirable or causes discomfort.

Decreasing

Refers to a reduction in size, quantity, or extent of something over a period.