The Substitution Effect of a Price Change Leads Consumers to ________

question 115

Multiple Choice

The substitution effect of a price change leads consumers to ________ their demand for goods whose prices have risen.The income effect leads consumers to buy less of all ________ goods whose prices have risen.

• A)reduce; normal
• B)increase; inferior
• C)increase; normal
• D)reduce; Giffen
• E)reduce; complement

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Definitions:

Stereotype Threat

The fear or anxiety of confirming a negative stereotype about one's social group, which can impair performance.

Algorithm

An algorithm is a step-by-step procedure or formula for solving a problem or completing a task, often used in mathematics and computer science.

Heuristic

A mental shortcut that allows people to solve problems and make judgments quickly and efficiently.

Physiological Activation

The process of stimulating the body's physical responses, often in reaction to stress or excitement.