The Substitution Effect of a Price Change

question 89

Multiple Choice

The substitution effect of a price change

• A)will result in the consumer buying less of a good at a lower price.
• B)will result in the consumer buying less of a good at a higher price.
• C)outweighs the income effect for Giffen goods.
• D)is equal to the income effect for normal goods.
• E)is equal to the income effect for inferior goods.

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Definitions:

Leisure

Time spent away from business, work, job hunting, domestic chores, and education, as well as necessary activities such as eating and sleeping.

GDP

Gross Domestic Product is the aggregate value, in terms of money or market price, of all end products and services generated within the confines of a country during a certain period.

Socioeconomic Variables

Characteristics that define the social and economic factors of individuals or groups, such as income, education, and occupation.

Standard of Living

The scope of wealthiness, contentment, material commodities, and life's necessities accessible to a certain class within the social economy or a defined area.