If the Price of an Inferior Good Rises,the Income Effect

question 30

Multiple Choice

If the price of an inferior good rises,the income effect

• A)will have an uncertain effect on consumption of the good,and the substitution effect will decrease consumption.
• B)will decrease consumption of the good,and the substitution effect will decrease consumption.
• C)and the substitution effect will both increase consumption of the good.
• D)and the substitution effect will both decrease consumption of the good.
• E)will increase consumption of the good and the substitution effect will decrease consumption.

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Definitions:

Three-Mountain-Problem

A cognitive task designed by Jean Piaget to study children’s ability to understand perspectives other than their own, illustrating the development of spatial awareness and egocentrism.

Farm Scene

A farm scene typically depicts a rural setting dedicated to agriculture and livestock management, often used in educational contexts to teach children about farming practices.

Perspective

A particular attitude towards or way of regarding something; a point of view.

Appearance

The way that someone or something looks from the outside, including physical characteristics and style.