The Substitution Effect of a Price Change

question 113

Multiple Choice

The substitution effect of a price change

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

---

Definitions:

Accelerating Pace

Describes the increasing speed at which changes, developments, or activities are occurring, often seen in technology, business, and society.

Interconnected System

A complex configuration in which components or entities are linked together so that each part affects or is affected by others.

Negatively Associated

Connected in such a way that one may adversely influence the perception of another.

Eccentric

Deviating from conventional or accepted usage or conduct, especially in odd or whimsical ways.