If the Price of Gasoline Goes Up, and Jacob Now

question 202

Multiple Choice

If the price of gasoline goes up, and Jacob now buys fewer candy bars because he has to spend more on gas, this would best be explained by

• A) the substitution effect.
• B) the income effect.
• C) the highly elastic demand for gasoline.
• D) all of the above.

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Definitions:

Commercial Unit

A Commercial Unit refers to a standard of goods that has been treated as a whole for purposes of sale or lease under the Uniform Commercial Code.

Nonconforming Goods

Products that do not meet the specifications, standards, or quality as stated in a purchase contract.

Not a Merchant

This term indicates an individual or entity that is not engaged in the buying and selling of goods or services, typically within the context of commercial law.

Reasonable Time

A legal term referring to a period of time that is fairly appropriate under the circumstances to perform a particular act or fulfill a duty.